We (my mother and 3 brothers) sold our ancestral house. My mother’s share was 62.5 % and 12.5% each was the share of we three brothers. The sale proceeds have been received in the above mentioned ratio/percentage. I intend to purchase a new residential flat jointly with my mother. Our investment in the new property will not be equal (30 % my contribution and 70 % will be my mother’s). Our share of investment and hence the ownership percentage in the new property will be clearly mentioned in the sale deed. My questions: 1. Can both of us (me and my mother) save CG tax on our respective share of investment; even when we are investing in the same new flat ? 2. I intend to put my name as the first owner and my mother’s name as the second owner in the sale deed. Will it have any implication on the CG tax computation for my mother? 3. Apart from the sale deed what other records will be required while filling the ITR?
1. You and your mother can avail the exemption equivalent to the LTCG arised irrespective of your share of investment in new property. Investment in joint property is eligible for exemption.
2. No implication. The clause of co-owners and the percentage of investment should be very specific.
3. Get the ITR filed by CA. He wil ask for the purchase deed, sale deed, bank statements, copy of purchase deed of new property and valuation report if any.
Hello,
1. Yes, both of you would be allowed the exemption of the amount of investment being made even in the same flat.
2. No, there would be no implications on the CG.
3. Details regarding the purchase date, purchase amount, and purchase expenses and sale details, date, sale amount, sale expenses would be required.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Dear Sir,
Hope you are doing well !!
1. Yes, it would be allowed.
2. No, there would be no tax implication on the same.
3. You need to pay 20% tax on capital gain amount. Amount of capital gain would depend upon sale price, sale date, purchase price and purchase date by your ancestors.
Also, where a capital asset has been inherited, the period of holding of the capital asset by the previous owner also needs to be taken into consideration in computing the number of years of holding.
-If the date of acquisition falls prior to 1 April 2001, you have a choice to consider the Fair Market Value (FMV) of the property as on 1 April 2001 as your acquisition cost.
So, firstly you need to get the valuation report of property as on 01.04.2001.
We may assist you in entire procedure.
1. Yes, both of you can save CG tax on investment as both of you are investing in it.
2. According to me, it will not have any impact.
3. The valuation of ancestral house will be required to calculate the capital gain.
Hi
1. Yes.
2. No, exemption shall be available.
3. Capital gain calculation is to be reported in the ITR. In case the property was bought before 1 April 01, cost of acquisition shall be value of the property as on 1 April 01.
1. Yes.
2. No since you both would be investing your respective share.
3. The valuation of your ancestral house.
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Thank you.
Hello Sir,
1. Yes, both of you would be allowed to take all the benefits of co ownership.
2.There would be no implication on the CG computation.
3. The valuation report of property as on 01.04.2001 will be required for capital gain calculation.
