Query on Captial gains amount usage

Hi,

Hope you are doing well !!

Yes, he will be able to take the benefit of exemption u/s 54.

Under Section 54 of the Income Tax Act, a taxpayer having long-term capital gains from sale of a residential property can avoid the same by purchasing or constructing a residential property 1 year before or 2 year after (in case of purchase of property) or before 3 years (in case of construction of property).

The amount of exemption under Section 54 of the Income Tax Act for the long-term capital gains will be the lower of:

Capital gains arising on transfer of residential house.

or

Investment made in purchase or construction of a new residential house property. Hence, the balance capital gains (If any) will be taxable.

Yes he surely can but and since he will purchase at the same price at which you had purchased there won't be any capital gain on your end.

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Thank you

Hi,

- Yes your father can invest but you need to add his name in purchase deed for income tax exemption.

Thanks

Hi,

Gift from a relative as explained by the Income Tax Act is not taxable in the hands of the receiver.Hence it is not taxable.

Clubbing provisions U/s.64(2) arises only in case when the Son is a Minor.

Any income arising from such gift will only be taxed in your/your wife hands.

However, it is always preferred to have a gift deed so as to avoid any gift being considered as taxable or being considered as unexplained cash, investments or assets.

If he is providing it as gift there will be no tax implication.

Hi

As gift received from relatives are Exempted from Tax.You and your wife can take lump sum amount from you father ,Execute a gift deed for the same.

Hope it helps.