LTCG property

Hi,

Hope you are doing well !!

There is a lot of controversy with respect to whether a person can invest in wife's name or not. There is no clarity on this aspect on whether he can invest in wife's name and claim exemption or not.


Therefore to be on the safer side, it is advisable that to buy the new property in joint name.In such an instance, at least a proportionate deduction would be available to the him.

Yes he can invest in another house in Delhi and get exemption from capital gain and he can do that by registering the property in his wife's name but I would suggest to keep his name as co-owner and keeping his wife's name as first purchaser for registration purpose this will make it easy to explain the transaction. Also there needs to be nexus between sale proceeds from the property and purchase of new property.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

The gains earned by your father will be long term capital gains if asset held for more than 24 months prior to sale.  The capital gains would be sale price less the indexed cost of acquisition.  The cost would be the actual cost as incurred by you to buy that property.  IN case the property was bought before 2000, the Fair value as on 1 April 2001 may be adopted as a cost of the property.  Indexation is a cost inflation index which is notified by the Govt.  . It is done to adjust for inflation over the years. This increases one’s cost base and lowers the capital gains.

• Capital gains earned by selling the property would be exempt from tax if such gains have been used for purchase within one year before or two year after the date of transfer of property or construction of a new house or has purchased a site and constructed a house thereon, within a period of 3 years after the sale of the original house. The house can be purchased anywhere in India and hence buying property in Delhi is not an issue
• If the amount of Capital Gain is not utilized for the above purpose, then before the due date of filling income-tax return, it should be deposited in a Bank under Capital Gains 1988 Account Scheme.  Accordingly, in case your father is not able to purchase by July 2019 (due date of filing return for FY 2018-19), the gains should be kept under capital gain account scheme and withdraw for utilization towards property. This new property cannot be sold till 5 years
• Ideally your father should do a joint registry having his name and mothers name to save the capital gains tax and avoid any litigation with tax department.

Dear Sir,

The law provisions require the seller to reinvest the gain amount within the stipulated time and there is no specific requirement that he himself should be the legal owner of the reinvested property.

However, to avail the benefit of the long-term capital gains exemption, given the risk of litigation by the tax department, it is certainly advisable for the taxpayer to acquire it in joint names with the close relative to whom he intends to bequeath the house, whether it is the spouse or a child, and not in the sole name of the spouse or child.

Hi

Its no where clearly written about the owner ship of property for claiming exemption but its advisable to take it in your name ,to avoid departmental litigation.

Hope it helps

It would be advisable to keep your dad as co-owner in new house & specifically show how much money he is contributing & how much your mom. Such action will ensure you get LTCG benefit.

Yes he is eligiblefor tax exemption as he would be deemed as owner of the new house. In future any income generated from the new house will be taxable in his hands.

Hi

Yes, your father can invest in your mother's name and claim the exemption under section 54. However, make sure your father is not entitled to any future benefits from such new house property.

LTCG exemption shall be available.