Yes they can claim the exemption u/s 54.
Is exemption allowed for purchase of joint property
A is an HUF and B is the wife of the kartha of the HUF. Both A & B sold one residential property each in August 2016 & September 2016 respectively. The capital gain for A was Rs. 65 lakhs and that for B was 75 lakhs. A & C (firend of A) jointly own a residential property purchased in the year 2006 and they have been receiving 50% of the rents for the last 10 years. Now C has come forward to sell his 50% share in this property. A & B wants to buy this 50% through a registered sale deed at the cost of 140 lakhs by invetsing the capital gains received by them through the sale of their respective properties in the year 2016. Once this sale deed is executed, A will own 50% (original share) + 23% ( new share purchased by invetsing Rs. 65 lakhs)=i.e.73% and B will own 27% which is the new share by investing the Rs. 75 lakhs. Can A & B claim exemption under the above manner/arrangement/transaction.
Asked 7 years ago in Capital Gains Tax
Yes surely A & B Both will able to claim exemption only condition is you need to pay required stamp duty and necessary changes in land records to be done.
Yes they can invest the same in buying the share in property of C.
Hello Sir,
Yes, A as well as B, both can claim the exemption in respect of their own share.
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
Dear sir,
Yes, A and B both can claim the exemption in respect of their respective shares.
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Thanks of the clarifications. I have a follow up question. A & B have now entered into a sale agreement with C and have paid Rs. 20 lakhs each to C. They will be paying the remaining Rs. 100 lakhs at the time of registration which will be done before July 31st. i.e. before the date of filing of returns. My question is: Can A & B take a Housing loan from SBI to pay the Rs. 100 lakhs as they would like to use the monies received from the sale proceeds for business purpose? Is it mandatory to use the same amount (monies) received from the sale of their respective properties?
Asked 7 years ago
No. They need to invest the capital gains in purchase of the Property.
For Business they can take business loan and cannot use the amount.
Sir,
You can take home loan and take benefit of the same. It is not mandatory to route the said amount for the purpsoe of claiming exemption.
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