Capital gains on sale of property

Capital gains on sale of property

Me and my wife bought land together in year 2000 and sold part of the land in 2017 and proceeds were credited to our account equally. We have started the construction of a new house in the remaining property.
I own another house in my name where we stay. Can my wife claim exemption under Section -54 for capital gains. Purchase cost was Rs. 5000 and sale at Rs. 153000

TDS was not deducted by the buyer, can I pay self assessment tax and then file returns at the end of the year.

Asked 8 years ago in Capital Gains Tax

Yes. The exemption would be granted.

Applying Section 54F, you will have to invest 153000 for the construction of the house property within 3 years of the date of transfer of the land.

Is the land registered under joint ownership?

Lakshita Bhandari

CA, Mumbai

5687 Answers

943 Consultations

Talk to Lakshita Bhandari

Hi,

Both of you can take the deduction under section 54F, if you invest the entire sale proceeds for the purpose of construction of house/ buying a house.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

Talk to Abhishek Dugar

yes you both can avail benefit of income tax but instead of section 54 allowed in section 54F, because as per section 54F any gain arising from sale of any long term asset other than residential property shall be exempt in full, if entire net sales consideration is invested in

1 purchase of residential house with in 1 year before or 2 year after the date of transfer of such asset or in

2 construction of 1 Residential house with in 3 year after the date of such transfer

conditions for availing section 54F

the assessee does not own more than 1 Residential house property on the date of transfer of such assets exclusive of one he has bought for claiming exemption under section 54F.

Lalit Bansal

CA, Delhi

776 Answers

61 Consultations

Talk to Lalit Bansal

Hi,

From what I understand, you and your wife sold part of the land (no property on it) and you own another residential property.

I think both of you can claim deduction under section 54F of the Income-tax Act, 1961. The condition is that you should invest in a residential property, and should not own more than one property, apart from the one sold. Since you own only one, you can claim benefit of this section. Further, since you'll be comstructing a residential property in the remaining portion of land, you will satisfy the condition of section 54F of investing in a residential property.

You can pay taxes on your own and file returns at the end of the year. If you want to avoid interest, then you can consider paying advance tax.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LL.B