Ltcg on reinvestment of sale of immovable property
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 January 2017
Dear Sirs,
I hold a Flat jointly with my wife which is 10 years old. This was acquired partly from our own sources and balance under Home Loan. HL availed by us from bank is cleared. Only I hv been claiming IT exemption for the principal and HL EMI . We now propose to sell the same and reinvest the sale proceeds partly or fully for buying a new flat jointly with our NRI son. My son will be availing a Home loan from a bank for a part amt . Will the reinvestment eligible for LTCG exemption or will I hv to pay tax on it ?
Grateful to receive your clarification
Ram
I hold a Flat jointly with my wife which is 10 years old. This was acquired partly from our own sources and balance under Home Loan. HL availed by us from bank is cleared. Only I hv been claiming IT exemption for the principal and HL EMI . We now propose to sell the same and reinvest the sale proceeds partly or fully for buying a new flat jointly with our NRI son. My son will be availing a Home loan from a bank for a part amt . Will the reinvestment eligible for LTCG exemption or will I hv to pay tax on it ?
Grateful to receive your clarification
Ram
06 January 2017
HI,
let me explain using an example
You had bought a house property for Rs. 10,00,000 in Jan 2007. (Partly with own funds and balance with Loan)
You are selling it today for 50,00,000 in Jan 2017.
You will be allowed a deduciton of (10,00,000 x 1125 / 519) = 21,67,630
So you have a LTCG of Rs. 28,32,370
If you buy a home of Rs. 30,00,000 in three person's name. However the previous property was only on your and your wife's name. So in such case you will get a proportionate exemption of Rs. 20,00,000 (30,00,000 x 2 / 3). So you will have to pay tax on balance amount.
let me explain using an example
You had bought a house property for Rs. 10,00,000 in Jan 2007. (Partly with own funds and balance with Loan)
You are selling it today for 50,00,000 in Jan 2017.
You will be allowed a deduciton of (10,00,000 x 1125 / 519) = 21,67,630
So you have a LTCG of Rs. 28,32,370
If you buy a home of Rs. 30,00,000 in three person's name. However the previous property was only on your and your wife's name. So in such case you will get a proportionate exemption of Rs. 20,00,000 (30,00,000 x 2 / 3). So you will have to pay tax on balance amount.
Message likes :
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06 January 2017
HI,
let me explain using an example
You had bought a house property for Rs. 10,00,000 in Jan 2007. (Partly with own funds and balance with Loan)
You are selling it today for 50,00,000 in Jan 2017.
You will be allowed a deduciton of (10,00,000 x 1125 / 519) = 21,67,630
So you have a LTCG of Rs. 28,32,370
If you buy a home of Rs. 30,00,000 in three person's name. However the previous property was only on your and your wife's name. So in such case you will get a proportionate exemption of Rs. 20,00,000 (30,00,000 x 2 / 3). So you will have to pay tax on balance amount.
let me explain using an example
You had bought a house property for Rs. 10,00,000 in Jan 2007. (Partly with own funds and balance with Loan)
You are selling it today for 50,00,000 in Jan 2017.
You will be allowed a deduciton of (10,00,000 x 1125 / 519) = 21,67,630
So you have a LTCG of Rs. 28,32,370
If you buy a home of Rs. 30,00,000 in three person's name. However the previous property was only on your and your wife's name. So in such case you will get a proportionate exemption of Rs. 20,00,000 (30,00,000 x 2 / 3). So you will have to pay tax on balance amount.
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