Capital gain exemption

(1) In Fin Ye 13-14 (Spt) My wife sold a residential property in Raipur which was in her name for 65 L.
(2) Capital gain of 17 L was calculated.
(3) she paid that whole amount as adv  in fin Yr 13-14 only towards purchase of a new residential property (Z1) in her name . At this point of time she was also a joint owner of residential property in our names ( Manorama Green View).

(4) In subsequent return this transaction was shown and exemption obtained.
(5) 1n 14-15 Fin year for the above new property (z1) TDS of 17172 was paid to builder TDS a/c.
(6) In 15-16 Fin Yr (Oct) further 55 L was paid for the same new property (z1)  as final settlement and registration was done in Dec-2015 and property  occupied same month.
(7) In Fin yr 15-16 (Oct-Jan) total 17 L was spent in interior work for which account kept.


Thus, more than 89 L was invested by her in new property. Old property was sold for much less 65 L.


Now, the jointly held propert (Manorama) is intended to be sold and proceeds to be shared by her and me in 50-50. (April-16, fin ye 16-17)


It is also proposed that she will use 15-16 investment in Z1 (new property) to get exemption from her share of cap Gain tax.


Pl advise.
Asked 9 months ago in Capital Gains Tax from Bhubaneswar, Odisha
If a new property  (i.e., Z1 in your case) is purchased within 1 year before the sale of the old property (in your case, jointly owned residential property), exemption can be claimed u/s 54, subject to fulfillment of conditions specified therein. So pl. ensure that the time frame is adhered to. 
B Vijaya Kumar
CA, Hyderabad
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No you cannot get the exemption. 

For details we need to have possession certificate . From that date the date of holding for capital gains purpose is calculated
Shyam Sunder Modani
CA, Hyderabad
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This question was already answered by me earlier but is shown as pending. I repeat the answer:

If a new property  (i.e., Z1 in your case) is purchased within 1 year before the sale of the old property (in your case, jointly owned residential property), exemption can be claimed u/s 54, subject to fulfillment of conditions specified therein. So pl. ensure that the time frame is adhered to.
B Vijaya Kumar
CA, Hyderabad
290 Answers
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YES SIR AT ANY POINT OF TIME AT THE TIME OF SALE, THE ASSESSEE SHALL HOLD ONLY ONE PROPERTY APART FROM THE ONE HE IS SELLING. IF THAT IS SATISFIED THEN BOTH THE PROPERTIES ARE DIFFERENT.

SIR ADVANCE PAID DOESNOT MEAN THAT YOU HAVE GOT OWNERSHIP. THAT IS WHY I MENTIONED THAT POSSESSION CERTIFICATE IS NEEDED.

IF YOU ARE NOT CLEAR OR MY ANSWER IS NOT CLEAR THEN YOU CAN MAIL ME AT MODANI005@GMAIL.COM SO THAT I WILL REWORK ON THAT AND ANSWER YOU
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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Dear Sir,

After considering your facts I have come to a conclusion that your query is whether your wife can claim Capital Gain Tax benefit by selling 2 properties i.e 1 Self Owner 2 Jointly Owned. (please correct me if I am wrong).

In that case, yes she can claim the Benefit of Capital Gain by investing in One Property the Sale Proceeds of 2 or more property.

So in your case it will be applicable as the property should be bought either 1 year before or 2 years after the Date of Sale.

Your Date of Purchase of Z1 property is December 2015 and Date of Sale of Jointly Owned Property is expected to be April 2016, which is well within the time limit.

Trust this clarifies your query.

Feel Free to get back/ call for any further clarifications.

Thanking You.

Regards,
CA Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP. 
Rohit R Sharma
CA, Mumbai
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