Capital Gains on Joint House Property
This query is : Resolved
14 February 2024
Dear Experts,
I need your advice on the following tax matter on capital gains on joint property
I bought a flat in 2009, which was registered jointly in my name and my wife's name. However, the entire value was fully financed only by me, a small component from my savings and around 90% from the housing loan. The payments for the housing loan were also made by me out of my salary, including the early settlement amount made to foreclose the loan. The joint registration was done only to facilitate hassle-free transfer in an unlikely event. No amount was paid by my wife for this house property.
Further, I had mentioned 100% ownership of this property in all my income tax returns and declared the income from rentals fully under my name. In 2014 I sold this property and full consideration was received in my bank account after TDS which was deducted under my PAN only. I had declared the full capital gains in my return. Since I had reinvested the amount in a new house property (registered only in my name) there was no capital gains tax.
IT department has initiated a show cause notice in my wife's name seeking clarification as to why the department should not consider 50% of the sale proceeds as capital gains under her name. When I checked with few friends who are CAs, they said if a joint owner has not funded for the house property, the taxability lies in the hands of the other joint owner(s) only. I am looking for solid grounds to defend my case. Are there any provisions in the law, or circulars, clarifications, court cases for me to do so.
Appreciate receiving a reply.
Thanking you all in advance,
Regards,
I need your advice on the following tax matter on capital gains on joint property
I bought a flat in 2009, which was registered jointly in my name and my wife's name. However, the entire value was fully financed only by me, a small component from my savings and around 90% from the housing loan. The payments for the housing loan were also made by me out of my salary, including the early settlement amount made to foreclose the loan. The joint registration was done only to facilitate hassle-free transfer in an unlikely event. No amount was paid by my wife for this house property.
Further, I had mentioned 100% ownership of this property in all my income tax returns and declared the income from rentals fully under my name. In 2014 I sold this property and full consideration was received in my bank account after TDS which was deducted under my PAN only. I had declared the full capital gains in my return. Since I had reinvested the amount in a new house property (registered only in my name) there was no capital gains tax.
IT department has initiated a show cause notice in my wife's name seeking clarification as to why the department should not consider 50% of the sale proceeds as capital gains under her name. When I checked with few friends who are CAs, they said if a joint owner has not funded for the house property, the taxability lies in the hands of the other joint owner(s) only. I am looking for solid grounds to defend my case. Are there any provisions in the law, or circulars, clarifications, court cases for me to do so.
Appreciate receiving a reply.
Thanking you all in advance,
Regards,
19 February 2024
Your wife can very well demonstrate the above facts in her reply giving your PAN details...and since it was financed by you, though she appears as a joint owner, all the income had to be clubbed in your income only. refer clubbing provisions of income tax act
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CAPITAL GAIN BASE ON NOTIFICATION
- Form 140 tds
- ITDS U/S.194T of Firm
- ADVANCE PAYMENT OF ADVOCATE
- NRI starting business in India
- GST not cancelled by tenant
- Demand Outstanding AY 2013-14 TDS Deducted not shown in 26as
- Invertaded duty struture
- FORM 141 SDV query
- Eway bill not cancelled within 24 hous what can be due
- REGARDING ANNUAL RETURNS FILLINGS OF A COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- CREDIT NOTES WITHOUT GST
- Taxable or Tax exempt
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
