Query on utilization of Capital Gains

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This query is : Resolved

Quick Summary

This discussion explores whether capital gains from selling two plots of land can be used to fund the demolition of an old house and the construction of a new one. The consensus is that yes, capital gains can be utilised for home construction. However, there's a note about potentially transferring the property into joint names, which is clarified as not strictly necessary for the husband to use his capital gains for the project.

Chandy

Chandy (Querist)

21 March 2022 Can we utilize the capital gains arising from sale of 2 plots (Land) for demolition of existing old house and construction of new house. No new house or land purchased in this case
Note:
One Plot to be sold is in the name of husband and another plot is in joint holding (husband and wife)
House property to be Demolished and constructed is in the name of husband

Please clarify

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

21 March 2022 Yes, it can be utilised for construction of house. Transfer the old house site after demolition in joint name.

Chandy

Chandy (Querist)

21 March 2022 Sir, thanks for the reply. Old House will be in husband name only even after demolition. Can he utilize his share of capital gains from both lands for construction.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

21 March 2022 Transfer in joint name required.

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