• Long term gain exemption

My father recently sold a piece of land. I wanted to know if the money that he got from this sale can be used by me for buying an apartment in order to save him LTCG tax. If yes, what kind of paperwork should I create so that in his ITR filing we can show this record.
Asked 4 years ago in Property Law
Religion: Hindu

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15 Answers

If sold land is agriculture land then you can buy only agriculture land to avail tax exemption.

Abhilasha Wanmali
Advocate, Nagpur
1022 Answers
1 Consultation

4.8 on 5.0

your father has to buy an apartment in his own name or in joint names out of the sale proceeds to save on capital gains tax .

There is no tax to be paid on the gains, if you use the entire gain from the transaction to buy another house within two years or construct another house within three years.

it cannot be bought solely in your name

Ajay Sethi
Advocate, Mumbai
87917 Answers
6207 Consultations

5.0 on 5.0

1. the sale proceeds received has to be reinvested by your father for purchase of a residential house within stipulated period mentioned in s.54 of Income Tax Act

2. the sale proceeds cannot be used to buy a house in your name

3. if that is done then your father will not get the benefit of exemption

4. however your father can make you a co-purchaser in the sale deed (but it has to be mentioned in sale deed that even though you are added as a co-purchaser, the entire money for purchase of house is contributed by your father from the sale proceeds of his old house)

5. also your father has to hold the new property for 3 years from date of its purchase and if he transfers the same during that period then the exemption will be taken back by the IT department

Yusuf Rampurawala
Advocate, Mumbai
6880 Answers
79 Consultations

5.0 on 5.0

Then you can buy residential property of the equal value of capital gain. As you are buying an apartment you should purchase it within 1 year of sale of your property.

If you wish to construct house then you have 3 years to use the consideration amount.

If all amount is not used within stipulated time then you have to pay 20% capital gain tax unused amount.

Capital gain amount need to be kept in separate account opened temporarily by bank to keep capital gain amount.

Abhilasha Wanmali
Advocate, Nagpur
1022 Answers
1 Consultation

4.8 on 5.0

Dear Client,

You can seek exemption u/s 54F of I T act by purchase of house within 2 yrs after or construct ONE house within 3 yrs after the date of transfer.

If you have not been able to invest your capital gains until the date of filing of income tax return (usually 31st July) of the financial year in which you have sold your property, you are allowed to deposit your gains in a PSU bank or other banks as per the Capital Gains Account Scheme, 1988. And in your return claim this as an exemption from your capital gains, you don’t have to pay tax on it.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

If you buy a new property with the sale proceeds of the land within next one year then you will get exemption. For this nothing extra is to be done and a plain and simple sale deed is to be registered.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

1) Let it be from which ever land you have get many by selling it. However if the residential house is purchased 20 years back. Than you don't have to pay much tax or otherwise you're buying new house than no need to pay LTCG tax. The long term tax as per paid accordingly to Index value.

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

The payment of the flat in your name can ve made through account of the father showing that he has made an payment for purchasing a property in your name.

Further there can be a sale deed in your favour of same flat. The ITAT and delhi high court has held the exemption cab be availed even when the new property is purchased in favour of close relative.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Further after judgement of Kaushal Kishore Maheshwari vs ACIT [TS-6590-ITAT-2017(DELHI)-O], it would be better if he is joint owner in the flat.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Within 2 years from the sale of the property you can purchase the land or an apartment from the long term capital gain amount to get exemption in payment of long term capital gains in case you are holding the amount then you have to deposit the amount in specified accounts in this regard available in various banks

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

To claim exemption under section 54 of IT Act, he can invest the capital gains out of the sale proceeds of his previous house property in the new house property.

The new house can be on your name also but it should be reflected in his ITR accordingly.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

The land which is sold is residential land and not agriculture land.

There is no capital gains tax for selling the agriculture lands

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

He can only purchase the land

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

I would advise you to please get in touch with a local CA for getting the paper work done on the portal of the income tax department

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

Hi,

You can reflect the said thing in column of ITR

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

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