Long term capital gain tax (LTCG)

My wife had made an agreement to buy a house in July 2014 , and paid a advance amount of 75% of the value of the house. The agreement was of a joint ownership , myself and my wife. The money invested on the advance amount was from my savings.
Mean time, she had disposed off her landed property in Oct 2016, and wants to invest the money in the above said property, and avail the exemption on the long term capital gains tax .
Is this Possible to avail the tax exception in the above case.
Can this be considered , as she had taken a loan from me to pay off the advance amount and on sale of her property, she repay my loan and make an out right purchase of the new house..
The new property is scheduled for delivery in May-June 2017.
Asked 22 days ago in Capital Gains Tax from Bangalore, Karnataka
Hiii

as per Income Tax Act you can claim exemption  from capital gain tax if Within a period of one year before or two years after the date of transfer you invest in new property thus in your case time limit not match i.e. Oct.2016 and July 2014, thus you cant take benefit of exemption from tax in above case.

Lalit Bansal
CA, New Delhi
75 Answers
5.0 on 5.0
  Talk to Lalit Bansal
Dear Sir,

As per section 54 and 54F of the Income Tax Act, 1961, you can avail exemption from long term capital gain tax if you have invested the amount of capital gain tax/sale proceeds within a period of one year before or two years after the date of transfer of old asset. However, in your case you have invested before beyond one year period and accordingly we are sorry to inform that you cant take benefit of capital gain exemption.

Please feel free to call/revert incase you need any clariifaction on the above.

Thanks and Regards,
Abhishek Dugar
CA CS B.Com
Abhishek Dugar
CA, Mumbai
766 Answers
5.0 on 5.0
  Talk to Abhishek Dugar
Hello Sir,

You cannot set off the tax liability as you had purchased the house property in July 2014 and sold your existing property in Oct 2016 which is more than 2 years. You could have done it if the time gap is less than 1 year.

Have you got the agreement registered with the authorities. ?

Trust this clarifies your query. 

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

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
719 Answers
5.0 on 5.0
  Talk to Rohit R Sharma
If your query is not answered u can mail at modani005@gmail.com
Shyam Sunder Modani
CA, Hyderabad
955 Answers
4.9 on 5.0
  Talk to Shyam Sunder Modani
Hello Sir,

Its difficult to prove even if you change the agreement beacuse the AO may also proof of all payments you have done to the builder. In that case he will automatically come to know that you have booked the property in the year 2014. 

Trust this clarifies your query. 

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

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
719 Answers
5.0 on 5.0
  Talk to Rohit R Sharma

Ask a Question

Get tax advice from top-rated chartered accountants. It's quick, easy, and anonymous!
Ask a question

Other Questions

Chartered Accountants

Abhishek Dugar
CA, Mumbai
766 Answers
5.0 on 5.0
Shyam Sunder Modani
CA, Hyderabad
955 Answers
4.9 on 5.0
Rohit R Sharma
CA, Mumbai
719 Answers
5.0 on 5.0
Vishakha Agarwal
CA, Bangalore
213 Answers
5.0 on 5.0
Shiv Kumar Agarwal
CA, Delhi
197 Answers
5.0 on 5.0
Lalit Bansal
CA, New Delhi
75 Answers
5.0 on 5.0
Vishrut Rajesh Shah
CA, Ahmedabad
194 Answers
4.9 on 5.0
B Vijaya Kumar
CA, Hyderabad
290 Answers
5.0 on 5.0
Ria Nagpal
CA, Ahmedabad
28 Answers
5.0 on 5.0
Bhagyashree Kankaria
CA, Pune
26 Answers
5.0 on 5.0