• CG exemption on sale

I have sold a property Uttrakhand and plan to buy another one in Maharashtra of nearly the same amount. I want to avail of the Capital Gains Exemption. The property I sold in Uttrakhand was on my sole name but I want to buy the one in Maharashtra on my name and put my son's name as well as joint holder. Will that affect the amount I can claim for capital gains exemption.
Asked 2 months ago in Property Law from Singapore
Religion: Hindu

you are at liberty to reinvest sale proceeds in purchase of another property in joint names and claim benefit of exemption from capital gains 

 

2) Merely because sale deed is in joint name, assessee could not be denied benefit of deduction u/s 54. [DIT v. Mrs. Jennifer Bhide 15 taxmann.com 82 (Kar.) [2011]]

Ajay Sethi
Advocate, Mumbai
59705 Answers
3613 Consultations

5.0 on 5.0

Yes you can claim the capital gain if the complete amount is paid by you from the proceeds received by selling the other property . You will get the benifit of capital gain exemption.


Pay the complete amount by cheque of DD from.the account you receive proceeds.

Shubham Jhajharia
Advocate, Ahmedabad
14127 Answers
57 Consultations

5.0 on 5.0

You can invest a maximum of Rs 50 lakh in specific bonds and investment should be made within six months from the date of sale.

 

Mohammed Mujeeb
Advocate, Hyderabad
6203 Answers
3 Consultations

4.5 on 5.0

Exemptions under Long Term Capital Gains:

The exemptions on long term capital gains are:

Profit on sale of residential house (Section 54):

If the house is sold for residential accommodation, if it is self-occupied or rented out, you can avail full exemption, provided:

  • The assessee must be an individual or Hindu Undivided Family.
  • The assessee has held the house for more than 3 years.
  • The assessee has purchased a new house one year prior to the sale or two years after the sale of original house or if he is constructing a new house within a period of 3 years after the sale of original house.
  • If the amount is deposited in a bank under the Capital Gains 1988 account scheme.
  • If the cost of the new house is equal to or more than the capital gain earned.
  • If the cost of the new house is less than the capital gain, then the difference amount is taxed at 20%.
  • If the new house is sold within 3 years from the date of purchase or construction, then the cost of the new house is deducted by the amount of capital gain exempted on the original house and the difference in the sale price of the new house will be treated as a short term capital gain.

If the capital gain is invested in long term specified assets of NHAI or Rural Electrification Corporation (Section 54EC):

It is subject to the following:

  • The profit earned is from the sale of a long-term capital asset.
  • The assessee must invest a part of the capital gain or the whole of the gain in specified assets like bonds of NHAI or REC that have a 3 year lock-in period, 6 months from the date of sale of the original asset.
  • The investment made should not be less than the capital gain. If a part of the gain is invested, then the proportionate amount will be exempted while the balance amount will be taxable.
  • Assessee must retain the new asset for a minimum of 3 years.

Profits from the sale of an asset other than a residential house is used to buy a residential house (Section 54F):

This is subject to the following conditions:

  • The assessee must be an individual or a Hindu Undivided Family.
  • The capital gain should be from a sale of an asset that is not a residential house.
  • The assessee has bought a new house one year before the sale of the asset or two years from the sale. He can also construct a house within 3 years from the sale of the original asset.
  • The cost of the new house must not be less than the value of the asset sold. If a part of the capital gain is invested, then only that part will be exempt, the balance amount will be taxable.
  • If the full amount is not invested to either buy a house or construct it, then it should be kept in the bank under Capital Gains Scheme 1988 account. The amount in that account should be utilised for constructing a house or to buy a new house.
  • On the date the assessee is selling the original capital asset, he must not own more than one residential house apart from the new house. He must also not buy another house in 2 years or construct a new house from 3 years of buying or constructing the new house.

Rahul Mishra
Advocate, Lucknow
2902 Answers
9 Consultations

5.0 on 5.0

Dear Client,

LTCG exemption available even buying property solely in the name of close relative. No effect if purchase in joint ownership.

Yogendra Singh Rajawat
Advocate, Jaipur
8884 Answers
8 Consultations

4.7 on 5.0

the property can be purchased anywhere in India

the property can be bought in joint names with your son

so long as the consideration for purchase of the property is being contributed by you, you can avail the capital gains tax exemption 

Yusuf Rampurawala
Advocate, Mumbai
3667 Answers
16 Consultations

5.0 on 5.0

  1. As per the information mentioned in the present query, makes it clear that you have got someapuny after selling a property in one state and now want to buy a property in another state, so that may not be asked to pay the Capital Gain Tax.
  2. There is no law which can prohibit someone from selling a property in one state and buying in another state.
  3. As long as you can invest the amount so received within one year over the purchase of another land/ property, you are exempted from capital gain tax, irrespective of the fact that you are buying in the joint name or for someone else’s name or in another state.

Sanjay Baniwal
Advocate, South Delhi
3780 Answers
7 Consultations

5.0 on 5.0

1. You can claim exemption from paying CG Tax in case you invest the entire amount in buying your only dwelling house.

 

2. Adding the name of your son as joint holder does not change your status and also the exemption in paying the CG Tax.

Krishna Kishore Ganguly
Advocate, Kolkata
21447 Answers
549 Consultations

5.0 on 5.0

Yes. You'll  be able only half of the capital gain exemption if you do the same.

Siddharth Jain
Advocate, New Delhi
3201 Answers
35 Consultations

5.0 on 5.0

You can use your entire capital gain processing the property in Chhattisgarh and there is no problem that if you includes your son's name as a CO owner of the property

Vimlesh Prasad Mishra
Advocate, Lucknow
4708 Answers
11 Consultations

4.9 on 5.0

1) Yes, you will still enjoy capital gain tax as per Index.


In Maharashtra where you're purchasing new plot or agricultural land plus you are NRI or OCI or Indian citizenship.

Ganesh Kadam
Advocate, Pune
6253 Answers
46 Consultations

4.9 on 5.0

You can buy property on a joint name also and can avail capital gains tax exemption.

 

T Kalaiselvan
Advocate, Vellore
49835 Answers
590 Consultations

5.0 on 5.0

Said judgment cited herein above is conclusive that you are entitled to benefit of exemption if property is bought in joint names 

Ajay Sethi
Advocate, Mumbai
59705 Answers
3613 Consultations

5.0 on 5.0

The provisions of law is very clear in it.

Your worries about different citations and different opinions are unnecessary.

You may go ahead with your proposal.

 

T Kalaiselvan
Advocate, Vellore
49835 Answers
590 Consultations

5.0 on 5.0

Yes the exemption shall be available after case of Jennifer there was of Honorable Delhi High Court in case of CIT vs. Ravinder Kumar Arora (342 ITR 38) wherein in the context of section 54F of the Act, it was held that where the assessee has included the name of his wife and the property has been purchased jointly in the names, it would not make any difference and the conditions stipulated in section 54F stand fulfilled.

Also recent judgement of ITAT jaipur Shri Vivek Jain Vs. DCIT is in favour.

Shubham Jhajharia
Advocate, Ahmedabad
14127 Answers
57 Consultations

5.0 on 5.0

Yes as per section 54 you can do that.However, in case you sell your asset and only use a portion of the gains to buy a property, you can claim exemption only on the amount you use for property purchase. The rest of the amount will be taxable as per the long-term capital gains taxation rule.

Prashant Nayak
Advocate, Mumbai
7054 Answers
7 Consultations

4.8 on 5.0

Order is conclusive and other courts/tribunal of India have same observation.

Yogendra Singh Rajawat
Advocate, Jaipur
8884 Answers
8 Consultations

4.7 on 5.0

1. What have been stated in my earlier post is the legal advise based on current legal persprective.

 

2.It will only change in case the legal provisions are altered  by the Parliament.

Krishna Kishore Ganguly
Advocate, Kolkata
21447 Answers
549 Consultations

5.0 on 5.0

You have period of 2 years from sale of property to reinvest capital gains in purchase of another property 

Ajay Sethi
Advocate, Mumbai
59705 Answers
3613 Consultations

5.0 on 5.0

It's below 2 years for the property. No need to keep it in special account only investing the same is important

Prashant Nayak
Advocate, Mumbai
7054 Answers
7 Consultations

4.8 on 5.0

Yes you have 2 years from sale of your property. No you don't have to put money in any special account you have to just show that amount invested in returns.

Shubham Jhajharia
Advocate, Ahmedabad
14127 Answers
57 Consultations

5.0 on 5.0

You can invest in a new property within two years from the date of sale of previous property.and park your amount in it for another year.

If you still would like to extend the time you may open an account in the bank for this purpose alone 

T Kalaiselvan
Advocate, Vellore
49835 Answers
590 Consultations

5.0 on 5.0

Yes in capital gains account before date of furnishing of your IT returns

Yusuf Rampurawala
Advocate, Mumbai
3667 Answers
16 Consultations

5.0 on 5.0

1. You shall have to invest the amount in buying a dwelling house within two years 

 

2. You should keep the said amount in a seperate account to keep clear accounts of the amount though it is nbot the rule that you shall have to keep the said amount in a special account.

Krishna Kishore Ganguly
Advocate, Kolkata
21447 Answers
549 Consultations

5.0 on 5.0

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