Short term capital gains

This query is : Resolved

Aaron Fuld (Querist)
Follow

13 October 2012 My wife and I jointly bought a property for 50 lacs in 2010. We are now planing to sell it for 75 lacs.
How will the short term capital gains be taxed? will each of us be liable for only tax on 12.5 lacs?
Further, is there any expense or loss we can offset against this income?
Thanks

Pankaj Gupta

Pankaj Gupta (Expert)
Follow

13 October 2012 First of all, on such transfer, short term capital gain will arise. Deduction will be given from sale consideration for cost of acquisition, any brokerage paid, expenses in regards to any capital improvement, registration expenses, and other expenses of transfer. So computed capital gain will be added to you and your wife's income in the ratio of your share in the property.

Pankaj Gupta

Pankaj Gupta (Expert)
Follow

13 October 2012 But division of capital gain will be done only when if your wife used her own income for the purchase of such property. Ie such amount for purchase was not rooted through your income directly or indirectly.

Aaron Fuld

Aaron Fuld (Querist)
Follow

13 October 2012 60% of the acquisition cost came from my wifes account and 40% from mine.
Does this mean the capital gains will be applied 60% to her income and 40% to mine?
we own the property jointly- does this mean it will be 50:50?
Thanks

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
Follow

14 October 2012 YES IT WILL B SIXTY FORTY

Pankaj Gupta

Pankaj Gupta (Expert)
Follow

14 October 2012 It will be divided in sixty forty ratio.

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
Follow

15 October 2012 it is advisable to sell it after a year as it will save tax.

Aaron Fuld

Aaron Fuld (Querist)
Follow

18 October 2012 Thank you for your responses.
Any inputs on the second part of my question:
can the short term capital gains be offset against any expense or losses?

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
Follow

18 October 2012 It can be offset by Short term capital gain.

Pankaj Gupta

Pankaj Gupta (Expert)
Follow

19 October 2012 Such short term capital gain can be offset against current year losses from the head house property,and short term capital loss.

Aaron Fuld

Aaron Fuld (Querist)
Follow

20 October 2012 so if i have a short term capital loss in shares or derivatives, can that be used to offset the short term capital gains on the property?
Thanks

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
Follow

20 October 2012 the answer is yes STCL fm shares and derivative can be set off ag STCG on property
CA MANOJ GUPTA
JODHPUR
09828510543

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now