• New property in spouse's name to gain tax exemption

I have sold one joint (with spouse) property in July 2016 and wanted to take another one to avoid long term capital gain tax, but the issue I'm facing here is for purchasing new property I am not available in India and I have given POA to wife to do on behalf of me.
But registrar is telling that I have to be here in person if property need to register in my name.
Can I purchase new property in wife's name alone and get exemption ?
Few links suggested I can but few are not clear.
http://www.business-standard.com/article/pf/capital-gains-tax-exemption-for-joint-property-also-113020901091_1.html
Asked 2 years ago in Capital Gains Tax from Ujjain, Madhya Pradesh
Dear Sir,

It's a litigatious point. In certain cases, courts have allowed the investment in wife's name and in certain cases not.
Abhishek Dugar
CA, Mumbai
2934 Answers
123 Consultations

5.0 on 5.0

you are already having conversation with my other professional colleague.
Shyam Sunder Modani
CA, Hyderabad
1408 Answers
95 Consultations

5.0 on 5.0

As I mentioned, it's a litigatious matter. You can claim it but you may have to face litigation.
Abhishek Dugar
CA, Mumbai
2934 Answers
123 Consultations

5.0 on 5.0

sir although this case need detail study but prima facia advice is to go ahead and purchase property in wife name
Anuj Agarwal
CA, Aligarh
43 Answers

4.4 on 5.0

Section 54F of the Income Tax Act mandates that a house should be purchased by the assessee. And it does not stipulate that the house should be purchased in the name of the assessee only. Inclusion of the name of the wife should not stand in the way of the deduction legitimately accruing to the assessee. The objective of Section 54F (and the like provision such as section 54) is to provide impetus to house construction and so long as the purpose of house construction is achieved, a technicality should not impede the way of deduction which the legislature has allowed. Purposive construction is to be preferred as against the literal construction, more so when even literal construction also does not say that the house should be purchased in the name of the assessee only. Section 54F is a beneficial provision which should be interpreted liberally in favour of the exemption / deduction to a taxpayer and deduction should not be denied on hyper-technical ground.

Thus sir in your case you should take advantage of the same and you should pay the money for purchase from your account to get exemption
Shyam Sunder Modani
CA, Hyderabad
1408 Answers
95 Consultations

5.0 on 5.0

Hello Sir,

There is no straight jacket answer to your query. As per law the new property is to be purchased by the assessee,  and not in the name of the assessee. But many assessing officers reject the claim saying that the new property is not in your name, against which you have to fight it out.

If picked up your case will surely invite litigation, but you can appoint a good professional to buy out on points that it was the sale proceeds that were invested in the new property and because of reasons out of your control you couldn't put your name in the agreement.

Do also consider the cost benefit analysis before taking a step ahead.

Trust this clarifies your query. 

Feel free to call back/ get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP.
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

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