Ltcg 54f exemption

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This query is : Resolved

nitin (Querist)

19 May 2016 Mr. X (Father) sold house property & LTCG is approx. Rs. 53,56,726 since CII is not declared for FY 2016-17 (I assumed 1100). So approx tax amt will be Rs. 10 lacs. (Pur. amt 1,00,000 FY 92-93, SP 58.5 lacs)
He don't want to invest in any bonds or CGAS or buy a new property since he require money.

My Query:-
1) Mr. Junior (Son of X) have a property in his own name purchased in 2011. Now can Father purchase a house from his son, make /agreement , pay stamp duty & claim exemption. is it valid?......if yes then son will pay tax arnd 2 lacs (assuming son purchased house for 40 lacs in 12-13), pay stamp duty on transfer arnd 50,000. ultimately save tax arnd Rs. 7,50,000.
OR
2) Can father become co-owner in son's property by paying loan installments of Son's Property & claim exemption.

Plz guide sir.....I was reading past cases on this, not found till this posting.

Amol S Joglekar

Amol S Joglekar (Expert)

19 May 2016 yes, father can buy property from son, either whole or partial, and accordingly can claim exemption u/s 54F, subject to however, other conditions of the said section.

nitin

nitin (Querist)

19 May 2016 I m afraid dat ITO will not counter argue by saying its a transaction between relative...or considered it as sham transaction....( i hv little knowledge abt sham transaction)

nitin

nitin (Querist)

19 May 2016 I hv also heard dat full ownership in new house required to claim exemption u/s 54F, is dat contention valid?

Amol S Joglekar

Amol S Joglekar (Expert)

19 May 2016 Dont be afraid of. FEAR has no value in Act. SHAM means bogus....This can NOT be bogus as the money is going to pass from father to son.

nitin

nitin (Querist)

19 May 2016 Thank you so much....

Amol S Joglekar

Amol S Joglekar (Expert)

19 May 2016 you are most welcome.