We have booked a property with my wife and son as joint owners. Initial payments will be made from my account since we intend to sale a property which is on wife's name and use the sale proceeds for the payment of installments of new property. Will initial payment of the installments from my account directly to the builder untill my wife receive proceeds from the sale of property, have any implication on LTCG or I should first transfer amount to my wife's account and then she pays tp the Builder. Please advise.
Is it ok from LTCG point of view to keep my son as first applicant and my wife as second applicant in the property registration/sale deed.
- You can give her short term loan for payment of installments and she will repay you after receiving the sale proceeds
- No problem in availing benefit of exemption u/s 54/54F
- Also check for applicability of deduction of TDS
For detailed discussion you may opt for phone consultation
Initial payment from your account to the builder will not by itself cancel your wife’s LTCG exemption, as the key test under section 54/54F is that your wife should be a real co-owner/investor in the new residential house.
However, for safer documentation, it is better to first transfer the amount to your wife’s account and then let her pay the builder, or clearly treat your payment as a temporary loan/advance to her.
Keeping your son as first applicant is generally not a problem, but your wife must be clearly shown as co-owner with proper share in the agreement/sale deed.
For a more detailed review of your case, you may book a phone consultation.
CA Shubham Goyal
