Investment options to save on capital gain tax

Investment options to save on capital gain tax

I have missed out on time to invest the CGT in govt bonds. Need to know my options to invest CGT as the proceeds received are from a gift deed transfer of old property by my parents.
1) Can I invest the CGT in my existing property that I purchased 2.5yrs ago for repairs?
2)if I sell my existing property to upgrade to a new property can I use the CGT of the gift deeded property proceeds?
3) Can I use my CGT to be Co owner of my Husbands existing property that he purchased 2.5 yrs ago?

Asked 7 years ago in Capital Gains Tax

Have you only received a property as a gift? Or you have sold the gifted property? Tax is applicable only when the gifted property is sold.

1. No

2. No

3. If you are paying the amount of capital gains to your husband and getting a registration done for the co-ownership in the property, it would be considered as sale of property by your husband and a purchase by you. If such sale transaction happens within 2 years or sale of gifted property, capital gain tax shall be exempt.

Above all this, let us know whether the gifted property is sold or not. Also, capital gain calculations need to be done. Please provide the details of costs and sales consideration and respective dates of transfers.

Lakshita Bhandari

CA, Mumbai

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Ty for the response... Properties sold within 3 yrs of it been gifted. I have the calculations.
Question pertaining to the last answer to my question 3.....will there be any challenges if my husband sells his property for much less than the market value to me in regards of taxation for him?

Asked 7 years ago

Please find below response to your queries:

1. No

2. No

3. No. Not advisable.

Regards,

Nikhil.

Nikhil Khanna

CA, Mumbai

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Hi,

1. No you cant do so. It will not help you to save capital gain tax.

2. No

3. Yes, you can buy the property from your husband to save capital gain tax. However, the sale needs to be as per the market rates otherwise it may create issues.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar

CA, Mumbai

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1) No exemption would be allowed.

2) Yes you can.

3) Matter of litigation.

4) No challenges but your husband has to consider atleast stamp duty value for capital gain calculation.

Vivek Kumar Arora

CA, Delhi

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Ok. In that case LTCG shall apply.

Yes. For him, if actual consideration is less than stamp duty value of the property, capital gain calculations will be done considering the stamp duty value of the property to be the sales consideration.

Lakshita Bhandari

CA, Mumbai

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What did you mean by upgrading property?

If you are selling your existing property, you can utilize the capital gains for this sale and capital gains for gifted property to invest in one residential house property to claim the exemption.

Lakshita Bhandari

CA, Mumbai

5687 Answers

943 Consultations