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Capital gains on sale and purchase of property

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jayaram (Querist)

18 December 2013 Experts

Pl guide me on following Capital gain issue
involving sale and purchase of property

1. Wife a retired employee sold flat which is in her name and deposited entire proceeds in capital gain account scheme and tax return was filed for fy 12 13

2. Husband retired employee wants to sell his flat now (FY 13 14) and intends to use both his sale proceeds and wife capital gain amount to purchase another flat jointly with equal rights (50:50)

I went through CIT vs. Ravinder Kumar Arora case but still want to check with experts

1. Can this type of arrangemnt be made ?

2. If yes, would that have any implicaiton
from tax angle on the parties ?

3. Treament of same in husband's FY 13 14
tax return

Thanks in advance
Jayaram

Manish Bhandari

Manish Bhandari (Expert)

18 December 2013 Yes it is permissible. If the gain of both the parties is utilised in the new property then no tax effect.
Husband has to disclose his share of investment against the gain.

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