Long term CG tax on property sale

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This discussion clarifies how to handle Capital Gains (CG) tax when selling a property bought jointly with your wife. You don't need to declare the new property purchase in your current year's ITR if your total taxable income is below the threshold and you're claiming loan interest rebate. The sale of the old property and any capital gains should be declared in the financial year the sale occurs, not before. You can then claim exemption under Section 54 for the new property purchased within a year of the sale.

Alok S

Alok S (Querist)

04 April 2024 I have bought a property worth 1.7 Cr in joint name with my wife in August 23 (FY 2023-24).
I intend to sell an old property in 2-3 months (FY 2024-25), which was bought in 2010 for Rs. 40 lakh in the joint name of myself and wife.
Pl. help me with following queries.
(i) Whether I need to show new flat purchase in AY 2024-25 ITR? I am claiming rebate on loan interest. And also my total taxable income is less that Rs. 50L. I am filling ITR-2.
(ii) Do I need to show anything in CG schedule of ITR this year? If yes, how?
(iii) Next financial year, after sale of old flat, how to adjust the CG against purchase of flat this FY i.e. 2023-24.

Thanks in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 April 2024 i) yes show it under income from house property.
ii) and Iii)yes, show capital gains and adjust against purchase last financial year.
Capital gains exemption can be claimed under section 54 for the purchase before one year of sale.

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Alok S

Alok S (Querist)

05 April 2024 Thanks for the prompt reply. However, I am still not clear about query under (ii) above. When my old property is still unsold, how can I show anything under CG schedule in this year (AY 2024-25) ITR? I am worried that next year after claiming CG benefit, there should not be any problem for non disclosure of propery this year.
I hope I am able make myself clear.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 April 2024 No need to disclose anything in this Assessment year show it in the year of sale.

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Alok S

Alok S (Querist)

05 April 2024 Thanks a lot for clarification.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 April 2024 You are welcome...
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