Yes the above is possible in your matter
Capital gain and joint ownership with Son
Dear Sir, My retired father (68 years) is selling his small house in our native place in next 2-3 months by Jan-Feb 2023. Based on the sale assumption (after indexation), he will get Capital Gains of 20-25 Lacs.over all property value is 50 Lacs. We are planning to re-invest in a house of 95 Lacs by Dec 2022 (before the native property sale date). My questions are 1. Considering my father is retired with very small deposits, I am planning to purchase this new house in joint name of me and my father. So that I can take the home loan of 60 Lacs in joint name and I will be the primary applicant for loan. Remaining 35 Lacs we will arrange within the family. And once we get 50 Lacs from the property sell, we will deposit it in the home loan account to reduce our emi. Please suggest 1. If we can buy a house before selling the native property 2. Joint ownership of property for father and son ans Son being the primary application in home loan. Is this possible. In this case, Capital gain tax will be saved or not. 3. If not, what other options do we have.
Asked 3 years ago in Property Law
Religion: Hindu
First answer received in 30 minutes.
Lawyers are available now to answer your questions.
7 Answers
1) Yes, you can purchase property pre-sales of existing property sale deed transaction till before one year.
2) You can show your father's sharing ratio in the new property fifty percent sharing so you can save capital gain tax.
From sale proceeds property can be purchased in joint names of father and son
you can apply for bank loan for purchase of property
property can be bought 3 months before sale of another property
For exemption under section 54 of income tax act, it is pertinent that the property should have been sold prior to making this investment into a new property.
The investment can be made in another property jointly with the son also for claiming exemption
Under Section 54 a person is entitled to exemption on cgt only if the profits earned from sell of house is used to buy another house. The Section contemplates purchase of house after sell of property, not before such sale. Therefore, if property is purchased before sell exemption is not allowed.
dear client as but Income Tax Act if you invest all your capital gain in buying a property then no tax will be charged on the capital gain and if you get a loan to build a new house then you can claim deduction for the loan amount. How ever this you can do only once in your lifetime until and unless you sell the new white property and then by the another property.
1. yes the new property can be purchased one year before sale of the existing property sought to be sold
2. yes new property can be purchased in joint names of father and son. Capital gains tax will be saved
3. NA
