Section 54F, 269 SS

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This query is : Resolved

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This discussion examines whether Mrs A can claim full exemption under Section 54F for a jointly purchased property, using funds from her share sale to repay her husband and the joint home loan. It also queries the applicability of Section 269SS to payments made by Mr A on behalf of Mrs A, which were later repaid with interest through banking channels. The potential for Mr A to claim remaining exemption under Section 54F, considering clubbing provisions, is also explored.

Shweta

Shweta (Querist)
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07 February 2023 Mr A and Mrs A are husband and wife.
Mr A and Mrs A purchased a house property in February 2022 for Rs 50 Lakhs. Rs 20 Lakhs were paid by Mr A from his bank account to seller, property dealer, stamp duty etc.
Rs 30 Lakhs were arranged through joint home loan. Mr A paid the EMI of Rs 1 Lakh till December 2022.
The house property is in joint name and home loan is joint loan.
Mrs A sold the shares in June for Rs 50 Lakhs which is also the long term capital gain for her.
She repaid the remaining home loan of Rs 29 Lakhs. She also repaid Rs 21 Lakhs to Mr A along with reasonable rate of interest (considering his initial contribution as loan).

Query
Mrs A wants to claim 100 percent exemption under section 54 F.
Can Mrs A claim section 54 F for the loan repayment done to Mr A. (It was always the intention of Mr A and Mrs A to fund the house property though receipts of sale of shares.)

Query
Can the funding / payments done by Mr A on behalf of Mrs A for the purchase of house property fall under section 269SS and be liable for penalty 271 D. All the payments by Mr A were done thru proper banking channels on behalf of Mrs A and later refunded through her Bank Account to Mr A bank account along with interest.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 February 2023 What is the LTCG from sells of shares?

Shweta

Shweta (Querist)
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07 February 2023 50 Lakhs. Cost of acquisition of shares is almost Nil.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 February 2023 Under all conditions, she can claim Rs. 25 lakhs u/s. 54F.
Sec. 269SS not applicable here.

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Shweta

Shweta (Querist)
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07 February 2023 Thanks for the reply that 269SS is not applicable.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 February 2023 You are welcome.

Shweta

Shweta (Querist)
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08 February 2023 There is addition to above Query - The shares were purchased by her husband in her name in FY 2016-17. She transferred the amount back to her husband bank account in FY 2017-18.

In case the Assessing officer denies the 100 percent exemption to Mrs A. Can Mr A claim the balance exemption in his return after application of clubbing provisions of section 64. Will he be eligible for remaining 54F.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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08 February 2023 As the payment was made of the shares, there should not be clubbing of income.

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