14 November 2011
A PERSON(senior citizen ,IT assessee) HAS TWO different HOUSE PROPERTIES. IN THE CASE OF ONE HOUSE PROPERTY, HIS MAJOR SON AND THE PERSON ARE SHOWN AS JOINT BUYERS RESPECTIVELY IN THE SAME ORDER WHEN THE PROPERTY WAS REGISTERED intheir names AT THE TIME OF PURCHASE. IN THE CASE OF THE SECOND HOUSE PROPERTY,THE PERSON AND HIS WIFE ARE SHOWN AS JOINT BUYERS RESPECTIVELY IN THE SAME ORDER, WHILE REGISTERING THE PROPERTY PURCHASED 1.) NOW MY QUESTION IS WHEN THIS PERSON SELLS THESE TWO PROPERTIES AND BUYS TWO MORE HOUSE PROPERTIES , TO TAKE ADVANTAGE OF CAPITAL GAINS TAX EXEMPTION , IS IT REQUIRED THAT THE NAMES OF BOTH ( SON AND FATHER IN ONE CASE, AND THE PERSON AND HIS WIFE IN THE OTHER CASE) SHOULD APPEAR IN THE NEW PROPERTY REGISTARTION DOCUMENTS IN SAME ORDER AS SHOWN AT THE TIME OF PURCHASE ? OR THE FIRST NAME ( APPEARING IN THE PROPERTY DOCUMENTS WHEN REGD.) SHOULD APPEAR OR ANY ONE NAME IS SUFFICIENT.
2.) NEXT QUERY ON THE ABOVE ISSUE IS THAT THE MAJOR DAUGHTER AND MAJOR SON ( WHO OWNS ONE HOUSE JOINTLY WITH HIS FATHER) OF THE SAME PERSON , TOOK HOUSE LOANS TO BUY TWO NEW PROPERTIES . SALE AGREEMENTS ENTERED AND 50% SALE VALUE PAID THROUGH BANK LOANS BY DAUGHTER AND SON RESPECTIVELY. THE FATHER WANTS TO USE FULL SALE PROCEEDS OF HIS ABOVE EXISTING TWO HOUSES ( WHICH HE IS SELLING) IN THESE TWO NEW PROPERTIES.(IN THE FORM OF REPAY BANK LOANS TAKEN BY THE DAUGHTER AND SON FOR PURCHASE OF THE NEW HOUSES---- BANK LOANS ARE IN THE NAME OF SON AND DAUGHTER ONLY FOR THE TWO NEW HOUSE PROPERTIES RESPECTIVELY--), BANK SHALL RETAN BORROWER’S NAMES ( THE DAUGHTER AND SON BEING THE BORROWERS) ON THE (NEWLY FINANCED) PROPERTIES REGN. DOCUMENTS . AGAIN MY QUESTION IS IN WHAT ORDER THE NAMES SHOULD APPEAR WHILE REGISTERING THE TWO NEW HOUSE PROPERTY DOCUMENTS TO AVAIL CAPITAL GAINS EXEMPTION BY THE PERSON CONCERNED,HIS SON AND HIS WIFE WHO ARE ALSO JOINT OWNERS IN THE TWO EXISTING PROPERTIES? SINCE THE BANK MAY INSIST BORROWER’S ( THE DAUGHTER AND THE SON), NAMES TO BE SHOWN FIRST IN THE NEW PROPERTY DOCUMENT, (AT THE TIME OF PROPERTY REGISTRATION)S, HOW THE ORIGINAL OWNERS (SON AND FATHER IN CASE OF ONE HOUSE AND THE PERSON AND HIS WIFE IN THE SECOND CASE ) AVAIL CAPITAL GAINS TAX EXEMPTION?
15 November 2011
Answer to Q1. The house is name of two joint owners, the sale consideration accordingly will flow to two persons and NOT one person. This means the consideration is taxable in the hands of seller seprately. Accordingly, in order to save capital gains from tax, the total consideration from the sale of house requires to be invested back by both the persons jointly.
15 November 2011
The sale proceed generated out of selling the jointly held property will be counted in the joint hands in the same proportion as in the proportion the original investment was made in order to workout the capital gains separately for each seller. Now fresh investment in the new asset may be made by each seller jointly or independently.
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