Capital gains and clubbing

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 July 2017 X (Husband) sold his ancestral property acquired before 1981 in FY 17-18 which was in his name. He is acquiring new property in his wife's name (Y). Can the sale consideration be treated as investment in new property and accordingly gain exemption u/s 54 by X. The property would be used by the family for their residentail use but would have separate identity, would clubbing provisions be applicable to X for notional rent, since for Y it would be SOP and would have nil annual value.
Thanks in advance

Amol S Joglekar

Amol S Joglekar (Expert)

11 July 2017 Although there are various case laws stating that section 54 investment can be made in the name of other than seller(Capital gain holder).... it is better husband puts his name in the new property....to avoid mischief of law

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2017 Thanks for the reply. What about clubbing provisioins in the hands of X?

Amol S Joglekar

Amol S Joglekar (Expert)

12 July 2017 if it is in the name of wife, the clubbing provisions will be applicable.

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