Hi I have sold a Residential property for 30 Lacs (it includes TDS Paid of 40K buy the buyer) in AUGUST 2018 ,(Indexation cost of this property is 10 Lacs as per latest Indexation Table). Now I am buying in New Residential property for 50 Lacs (Plus Stamp duty of 2 Lacs) = 52 Lacs 1) The Difference amount ( 52 Lacs-30 Lacs) is 22 Lacs and its coming from own source plus i have borrowed same from my spouse /Children, amount borrowed in 10 Lacs. in total out of 22 Lacs . Questions 1) Can I register this new property with my children( Myself and 2 children) . 2) What will the TAX obligation if above method of money flow is followed. 3) How to same TAX in the above scenario. Please email me at [deleted]
Hi,
Hope you are doing well !
1. Yes, you can register this new property with your children.
2.As such, there is no tax obligation as you are already investing money/capital gain amount in residential property.
You are eligible to take the benefit of section 54.
3.No additional tax.
Hi
Firstly, TDS should have been deducted @1% by the buyer.
1. Yes, no issues.
2. Capital gains shall be exempt under section 54.
3. No tax obligation.
Hi,
1.Yes.
2. There will be no tax obligation.
You will be able to take the benefit of section 54.
3.No tax obligation.
Since you have invested your whole sale proceeds in buying new residential property you don't need to pay any capital gain tax provided the property is complete in 3 years.
It doesn't matter if you purchase it with your son's since whole of your sale proceeds has been invested so you don't have to pay any capital gain tax.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
Hi,
- Yes you can add the name of the childrens in the property as co-owner but for all purposes of income tax you will be treated as owner of the property.
- You will be treated as owner for all the tax compliances i.e rental income and capital gain on sale of property.
Thanks
Hi,
1. Yes. You can do so.
2. There will be no tax obligation as capital gains will be exempt u/s 54.
3. Tax will be exempt in your case.
Regards,
Nikhil.
The entire capital gains from the sale of your residential house would be taxable in your hands. To the extent of capital gains made from sale, the entire gains should be invested to avoid tax liability ie minimum 20 lacs.
The law does not have any restriction on joint ownership and hence you can register the flat as joint owners. Than it would be advisable that instead of loan taken from relatives the amount is shown as their share of contribution towards property. The agreement to buy should clearly specify the mechanics of payments and share of funds contributed by each owner.
Where the amount is taken as loan by you and still you would like to have a joint ownership, the clubbing provision of income-tax law would apply. There is clubbing provision in Income-tax law, which provides that in case of income from a property in future where the entire funds are met by you, such income would be taxed in your hands ie any rental income or capital gains in future thou there are co-owners.
IN case of funds taken from spouse, if they are merely out of money given by you, then the income if any in future from the property will be taxable in your hands. However, if your spouse has independent earning, than she can have have her share in property jointly. Similarly, if your kids are earning, then the proportion of contribution made by them can be their share in property.
Sorry couldn't understand your question properly due to typing mistakes.
But as per my understanding, following are my answers:
1- yes you can register your property jointly with your wife and children
2- there will be no tax as your income from capital gain will be zero as you are purchasing a new residential house of higher value than the total sales consideration of previous house.
3- there is no capital gain, so u don't need to do anything to save tax.
