• tax on income from flat sale

I am a pensioner. Recently i sold off my old flat (which was in my name). 
I propose to buy another flat to be registered jointly in the names of my wife (home maker) and my son (employed). If i use the above money for financing this, then what are the tax liabilities for me, my wife and my son ?
Asked 6 months ago in Income Tax from Kakinada, Andhra Pradesh
Hii

first you have to calculate Capital Gain Amount on old Flat sales then you have to invest the same in new residential property to save tax, you cant finance them to buy flat , you have to invest gain amount in own name to save tax, in some cases investment in wife names allowed.
Lalit Bansal
CA, Delhi
559 Answers
37 Consultations

5.0 on 5.0

Hi

Have capital gain calculations been done?
If the investment in new property is equal to or more than the capital gain, exemption shall be granted.

When you're registering in your mother's and wife's name, make sure the investment is done from your known and declared sources if income. Or else, there could be problems due to the changes by Benami transaction act.
Lakshita Bhandari
CA, Mumbai
2111 Answers
68 Consultations

5.0 on 5.0

Hi,
My suggestion is to add your name in the new property so that there are no issues later. You will need to reinvest the capital gains that you derive from the first flat sale in a new residential house property to claim exemption from capital gains tax.
Regards,
Nikhil
Nikhil Khanna
CA, Mumbai
1286 Answers
14 Consultations

5.0 on 5.0

1.Computation of Capital gain is required to comment on tax liabilities .
2.To claim tax benefit ,property should be on your name,though its allowed in some cases.You should have all documents to prove that transaction is done from your source of income only.
It is advisable to take property on your name.then in future you can write gift deed on your wife and son's name.
Swati Agrawal
CA, Indore
667 Answers
1 Consultation

5.0 on 5.0

You have to pay tax on entire LTCG as you are not owner in new house. For wife and some tax implications will arise on further sale.
Vivek Kumar Arora
CA, Delhi
1531 Answers
35 Consultations

5.0 on 5.0

Hi,

Ideally, you should buy a new flat in your name to get exemption from capital gain tax or at least you should be a co-owner otherwise chances are high that you will have to litigate the matter.

There are certain case laws wherein investment in other person's name has been treated as eligible investment but litigation is there.

Needless to say that exemption will be subject to other conditions being satisfied.
Abhishek Dugar
CA, Mumbai
3566 Answers
158 Consultations

5.0 on 5.0

Hello,

No tax liability for them as of now, but you will have to pay tax on your Capital Gains from sale of property which will be taxed @ 20% flat.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

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