You should deposit the complete amount in your account because the tax liability stands on you for complete consideration.
Capital Gain Saving Account - deposit on sale of jointly owned property
I had purchased a residential property (2010) jointly in my name and with my wife name, though entire amount was paid by me. I have sold that property (2018) and capital gain tax are coming to be 14 Lakh on that around 2,80,000/- tax to be paid. The entire amount of consideration has come in my account only (not in my Wife Account). I am planning to construct another residential property by investing this amount. However, that I can not do immediately. So to avoid LTCG TAX I want to park capital gain amount in "Capital Gain Saving Account". Should I deposit in "Capital Gain Saving Account" 50% (7,00,000) in my name and another 50% (7,00,000) in my wife name OR should I deposit entire 14,00,000 in my Capital Gain account. I am tax payer, my wife is housewife and does not pay tax. Please help.
Asked 6 years ago in Taxation
14 Answers
You being the tax payers CGSA deposit must be made in your account only. Further capital gain income of your wife shall be clubbed with your income.
See you both can deposit half half of amount into your accounts as she was joint owner to take benifit of same.
Also since there are gains then your wife has to.file a return of financial year.
You have purchase property to this sale transactions pre 1 year or post 2 years or can buy government bonds.
your wife has not contributed anything towards the purchase consideration, she will not be treated as a co-owner of the property for income tax purposes, even when her name appears in the sale deed as a purchaser of the property.
2) deposit Rs 14 lakhs into your account
3) consult a local CA
it will be in the person account who received the said gain. if jointly then both accounts
I got a little confused, as I did not get same answer. Majority said, entire capital gain (14 Lakhs) should be deposited in my "Capital Gain Saving Acct", some said as me and my wife joint holder it should be 50/50. I think I should elaborate my question a little bit: (1) Property was bought on my payment in ( year 2009-2010), very little/no contribution from my wife. But I today do not have any proof to say whether any amount was paid by my wife. Also even It is difficult, or nearly impossible for me to proof that entire amount was paid by me. I just truthfully, say/declare that I had paid nearly entire amount. Shall I have to prove this also, during/after ITR 2019-20 to be done before 31st Aug 2019, by me? (2) My wife has one income around 2 Lacs per annum, from one flat whose she is exclusive owner. After this LTCG (from the sale of property in question), does she require to file ITR also and showing the capital gain OR only I will have to show capital gain in my ITR? Please advise. Thanks
Asked 6 years ago
Being joint holder its 50 50 if both have received the said in joint account. IT depends on whose account the said gain relapsed.
Do not be confused. Law is clear here. If you transfer any assets to your spouse directly or indirectly without adequate consideration, the income from that assets shall be treated as your income and to be clubbed with your income.
Since you are to pay tax, CGSA must be made in your account not your wife's account.
This rule is not applicable in case of house property.
If you still have any doubts discuss with local experts.
1. It should be deposited in account of both husnand and wife equally.
2. iTR has to be filed.
As per your income tax returns filed by you entire consideration was paid by you
2) your bank statements would reflect payment made by you for purchase of flat
3) entire amount of Rs 14 lakhs should be deposited in your capital gains account
4) you have to show entire long term capital gain in your ITR
This is my response to you:
1. Record the tax in your account;
2. Enter into an affidavit stating that your wife was merely a cow-owner of the property but had not made any contribution to the purchase or maintenance of the property;
3. And since all the consideration was paid to you, she is not liable to pay tax;
4. Also she can state that you are the earning member of the family;
5. Consult a local lawyer and take steps.
if entire amount of consideration was paid by you at the time of purchasing property and no contribution from your wife then it should be deposited in your account only.
Whether your wife is a tax payer or not, sine the property is on the joint names, she also has to bear the capital gains taxes as applicable.
However you can park the entire amount in one single account or can open a joint account and can park this amount for future investment as per law.
Whether you paid the entire amount from your own sources or not, since the property has been purchased on the joint names, she is also liable for payment of applicable capital gains taxes.
Therefore you can open a joint account and lodge this amount in that account for future investment.
It is better that she show this income in her ITR to avoid future problems.