I have sold flat in June and money was transferred to me and to my father accounts as he was a co owner (50%each). Now entire money I have to use for my next flat purchase ( single owner), as my father don't want to be co-owner this time considering the age and travel. If he transfer the money to me for purchase of property, will he be liable for capital gain tax . If so what is the solution ? Is only way out is joint capital tax gain account ?
Hi
If your father don't want to be a co-owner, the safe option is to buy NHAI/ REC bonds for his part of capital gain value.
Although, there are case laws which says that a person can invest his sale proceeds in some other person's name but the position is litigative.
Hello,
You can buy a property solely in your name but it is subject to litigation. In such a case it is better to prepare an agreement with you and your father stating that because of his old age he wants you to buy the entire property in your sole name.
But be prepared for this to be disallowed at the AO level.
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
Hi,
Capital Gains tax will be payable by your father. If he is not interested in buying the new property along with you, then he can invest in NHAI / REC Bonds and save tax in this manner.
You can invest the entire money in the new property due to his old age, etc. However, this position is litigative but there have been precedents where the child has invested the parent's capital gain in a new property and courts have allowed it.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LLB
We suggest you to purchase the new property in Both names for capital gains exemption purpose and in future get the half share Gift from your father. By this there will not be any problem.
