How to save capital gains fully

How to save capital gains fully

Hi,
I sold a flat on May2016 for 23 lacs and my Father now selling his Flat(June2017) for 28 Lacs. After this we will jointly buy a Flat within next few months for around 80 lacs. All properties are "Residential" only.

My Questions:

1) Can both me and my Father save Capital gains entirely from sale of our respective residential properties by buying this new residential property in Joint name?

2) From what I know I must invest my capital gain amount in a CGAS within 31st July2017, right?
If so, should I need to invest the whole 23 lacs in CGAS or only the Capital gain amount from sale of my flat?

3) For calculating capital gains can I add cost of Registration, Stamp duty and Maintenance charges paid for the old flat that I sold for its indexed cost of old flat? Also can I add some other expenses like Grill work for which I don't have a receipt?

4) At the time of buying the new property, lets say my capital gain is 9 lacs and my father's is say 6 lacs so shall we just need to invest(9+6) 15 lacs to buy the new flat(I have funds/loan option available for balance payment) or do we need to invest whole sale proceeds of 23 lacs +28 lacs that is 51 lacs and only use 29 lacs of other funds/Loan to buy the new property of 80 lacs?

Please advise assuming we want to save 100% of Capital Gains Tax.

Thanks

Asked 8 years ago in Capital Gains Tax

Can anyone please answer this?

Asked 8 years ago

Hi,

1. Yes, you can save capital gain by buying a flat jointly. Agreement should clearly mention the amount invested by you and. Your father in the property.

2. Only the capital gain amount.

3. You can add stamp duty and registration charges. You can add maintenance and other routine reapirs.

4. You only need to invest capital gain amount.

I hope this suffice your requirement adequately.

In case you need any further details, you can call me via phone consultation option.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

Talk to Abhishek Dugar

Hi,

1. Yes, your father and you can buy a property jointly.

2. Only the amount of capital gains will have to be deposited in the CGAS account. You will have to invest only the amount of capital gain and not the entire sale consideration.

3. You can include the amount of registration and stamp duty that you have paid. However, regular maintenance charges paid cannot be included. Cost of improvement can be claimed, provided you have sufficient proof. This amount will also be indexed separately from the year in which you incurred it.

4. You will only need to invest the amount of capital gains i.e. Rs. 15 lakhs as per your example. It is up to you how you want to bring in the remaining amount to buy the new flat i.e. by way of a loan or invest the sale proceeds from the old property.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LLB