Yes, you both can claim exemption to the extent of your share of ownership of house. IN such case, both of you have to make separate investment in eligible asset / scheme to the extent of capital gains for claiming exemption.
You firstly need to determine the percentage of ownership in each of your hands – this can be done by checking the extent of cost incurred by each of you to purchase / construct the house.
In each of your hands, the capital gains would be the share of sale price less the indexed cost of acquisition. Indexation is to be done for the year you constructed the house. Indexation for land can be taken separately from the year you own land. The cost would be the actual cost as incurred to buy that 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 = sale price - indexed cost of acquisition – any other expenses incurred for executing sale. You can add the registration cost to your purchase price. The indexation are notified values and you need to consider the same for the year you acquired the house and sale the house.
You can invest capital gains for purchase of another house to save tax. The investment can be made jointly also and claimed in your tax filings to the extent of your share of gains. You should purchase a residential house either 1 year before the date of sale or 2 years after the date of sale. In case of constructing a house, you have to construct the residential house within 3 years from the date of sale. Until such purchase, the gains can be deposited in a PSU bank or other banks as per the Capital Gains Account Scheme, 1988. This deposit can then be claimed as an exemption from capital gains, and no tax has to be paid on it. However, if the money is not invested, the deposit shall be treated as capital gains in the year in which the specified period lapses. Kindly ask the buyer to deduct taxes in your respective share of gains, so that you guys can claim credit correctly. I believe in individual share the gains would be less than 2 crore and hence not applicable to you.