Query on Joint Property Sale

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This discussion addresses tax implications for a jointly owned property sale. The user seeks guidance on how to declare the sale proceeds and purchase price in their respective Income Tax Returns (ITRs), specifically whether to report the full amount or a 50% share. It also covers how to claim tax benefits for VAT charges, legal fees, and a payment made to vacate the property, including the application of indexation. The advice provided suggests splitting the sale and purchase amounts, adding VAT to the cost, and treating legal and vacating expenses as costs of sale, with a recommendation to mention the 50% share in the ITR.

Sharad

Sharad (Querist)
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03 July 2022 Hello,
I bought flat ~12years ago @16L and sold in FY 2021-22 in 40Lacs.
Sold property was Jointly owned by Me & my mother.
This sold transaction entry of 40lac (SFT-012) came in 26as & AIS of both me & my mother.

I need your help to understand,
Question 1 : while filing ITR how I need to show this
Option 1 - both me & my mother need to show full 40L
Option 2 - me & my mother need to show 20L each.

Question 2 : how the buy price needs to show for both the buyers
Option 1 - both me & my mother need to show full 16L
Option 2 - me & my mother need to show 8L each.

Question 3 : After 4/5 years, I have paid VAT charges of ~32000
How this can be shown in ITR to avail Tax benefit (with indexation)

Question 4 : I had some legal issues with my Tenant, who sublet my property to someone else.
In this case I had paid 25000 as lawyer fees.
and at the end paid 1 lac rupees to person staying in my flat to vacate.
How this 1 lac & 25 thousand can be shown in ITR to avail Tax benefit (with indexation)

I will be obliged If someone can help me on this.

Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 July 2022 1. Option 2 - me & my mother need to show 20L each.
2 Option 2 - me & my mother need to show 8L each. Update the cost with indexation.
3 Add it to the cost as addition.
4 Show these expenses as cost of sale.

Sharad

Sharad (Querist)
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03 July 2022 Thank you very much Sir for your reply.

3 Add it to the cost as addition.
>> Means, I should consider my buy price as 16.32 Lac (buy + VAT).

4 Show these expenses as cost of sale.
>> Means, expenses under category "Expenditure wholly & exclusively in connection with Transfer" in ITR (along with broker fee of 25k which I spent while transfer management)

2 more questions:
Question 5. Is there any way to show in ITR that I am entering this buy/sell amount as 50% because I am co-owner ?
Also, mentioning Same buyer PAN & Aadhaar in 2 separate ITRs (of me & My mother) will be OK. Or do I need to mention 50% sharing information anywhere in ITR.

Question 6 : Do I need to split this expense amount of 1.5L also as 50-50% in my & mother's ITR

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 July 2022 3 and 4 your observation is right.
5 yes, it's okay. Also mention 50% share.
6 yes, split the expenses.

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