Capital gains
This query is : Resolved
16 June 2013
Dear Sirs,
I along with my wife purchased a flat at noida in year 2010 in 52.5 lakh as co-owners and co-applicants(in home loan)under construction linked plan. EMI is being deducted from only my bank account.We have paid 17 lakh till date to the builder.
In march,2013 my wife sold her 2 bhk flat at lucknow gifted to her by her elder brother in 27.5 lakh.My question is
1)Can my wife invest the sale proceeds/capital gains of her gifted flat in the flat at noida purchased under construction linked plan as a coowner and coapplicant with me and be entitled for exemption from capital gains tax?
2) if the answer to Q 1 above is yes then what will be the extent of capital gains which can be saved, 100% or 50%.
Kindly respond soon.
Thanks!
I along with my wife purchased a flat at noida in year 2010 in 52.5 lakh as co-owners and co-applicants(in home loan)under construction linked plan. EMI is being deducted from only my bank account.We have paid 17 lakh till date to the builder.
In march,2013 my wife sold her 2 bhk flat at lucknow gifted to her by her elder brother in 27.5 lakh.My question is
1)Can my wife invest the sale proceeds/capital gains of her gifted flat in the flat at noida purchased under construction linked plan as a coowner and coapplicant with me and be entitled for exemption from capital gains tax?
2) if the answer to Q 1 above is yes then what will be the extent of capital gains which can be saved, 100% or 50%.
Kindly respond soon.
Thanks!
18 June 2013
invest in separate unit
than u/.s 54 you can claim deduction of captial gain expemtion
but in question you not mention the date of gift recd by his wife from his brother
than u/.s 54 you can claim deduction of captial gain expemtion
but in question you not mention the date of gift recd by his wife from his brother
18 July 2024
Based on the details provided, here are the answers to your questions:
1. **Investment of Sale Proceeds in Noida Flat:**
- Yes, your wife can invest the sale proceeds or capital gains from her gifted flat in the flat at Noida that was purchased under the construction linked plan as a co-owner and co-applicant with you.
- As per Income Tax provisions under Section 54, capital gains arising from the sale of a residential property (in this case, the flat in Lucknow) can be exempted if the proceeds are invested in another residential property in India.
- Since your wife is a co-owner and co-applicant of the flat in Noida, she can invest the capital gains to claim exemption under Section 54.
2. **Extent of Capital Gains Exemption:**
- The extent of capital gains that can be exempted under Section 54 depends on the proportion of ownership in the new property (Noida flat).
- Since you and your wife are co-owners and co-applicants in the Noida flat, the capital gains exemption can be claimed in proportion to her ownership share.
- For example, if your wife owns 50% of the Noida flat, then she can claim exemption on 50% of the capital gains arising from the sale of her flat in Lucknow.
### Important Points to Note:
- Ensure that the Noida flat is completed within the specified time frame after the sale of the Lucknow flat to claim the exemption under Section 54.
- The exemption under Section 54 can only be claimed if the new residential property is purchased within one year before or two years after the date of sale of the old property, or if a new property is constructed within three years.
- It's advisable to consult with a tax advisor or chartered accountant to ensure compliance with all the conditions and to optimize the tax benefits.
By following these guidelines and ensuring the proper documentation and timelines are met, your wife can effectively utilize the capital gains from the sale of her gifted flat in Lucknow to invest in the Noida flat and claim exemption from capital gains tax under Section 54.
1. **Investment of Sale Proceeds in Noida Flat:**
- Yes, your wife can invest the sale proceeds or capital gains from her gifted flat in the flat at Noida that was purchased under the construction linked plan as a co-owner and co-applicant with you.
- As per Income Tax provisions under Section 54, capital gains arising from the sale of a residential property (in this case, the flat in Lucknow) can be exempted if the proceeds are invested in another residential property in India.
- Since your wife is a co-owner and co-applicant of the flat in Noida, she can invest the capital gains to claim exemption under Section 54.
2. **Extent of Capital Gains Exemption:**
- The extent of capital gains that can be exempted under Section 54 depends on the proportion of ownership in the new property (Noida flat).
- Since you and your wife are co-owners and co-applicants in the Noida flat, the capital gains exemption can be claimed in proportion to her ownership share.
- For example, if your wife owns 50% of the Noida flat, then she can claim exemption on 50% of the capital gains arising from the sale of her flat in Lucknow.
### Important Points to Note:
- Ensure that the Noida flat is completed within the specified time frame after the sale of the Lucknow flat to claim the exemption under Section 54.
- The exemption under Section 54 can only be claimed if the new residential property is purchased within one year before or two years after the date of sale of the old property, or if a new property is constructed within three years.
- It's advisable to consult with a tax advisor or chartered accountant to ensure compliance with all the conditions and to optimize the tax benefits.
By following these guidelines and ensuring the proper documentation and timelines are met, your wife can effectively utilize the capital gains from the sale of her gifted flat in Lucknow to invest in the Noida flat and claim exemption from capital gains tax under Section 54.
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