Tds deduction on purchase of immovable property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2014 Dear Sir/Madam,

Mr.A & Mrs.B (a housewife with no income) are both residents of India. a residential flat is jointly owned by Mr.A & Mrs. A. They sold the said flat in FY 13-14 on which TDS was deducted by purchaser @1% in Mr.A & Mrs.A hand. The sale consideration was deposited in the joint bank account held by them & they are purchasing the new flat again in the joint name for which they are making payment from joint account.
My question are-
1. how i can claim tds refund of Mrs A?
2. how to show purchase cost & sale consideration both in the hands of Mr.A & Mrs.A.
3. how to allocate new flat purchase cost in both names for tax exemption?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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13 June 2014 depends on what you have been doing till now. how did you report income from this property in earlier years??

if both of the co-owners have jointly re-invested the capital gains, there is no reason to worry at all. once the exemption claim is made in the tax return, tax deducted shall automatically become refundable.

the correct way to show the same shall be to claim the whole of amount in Mr A's tax return and allocate the whole of the exemption also in his tax return.

Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2014 Dear Nikhil,
Thank you for your reply.
Flat is used by them for there own residence & they have not filed IT returns for earlier years as there income were below exemption limit.
Please advice on -
how should i claim refund of Mrs.A?
whether i should file IT return of Mrs. A with NIL income (as she has no source of income) & claim refund or i have to show capital gains workings?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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13 June 2014 1. the absolutely correct way is to show no income but claim tax credit.

2. however this would require that the whole of capital gains are offered in the husband's tax return.

3. where the case is picked up for scrutiny, you would need husband's tax return to establish the correctness of your claim

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Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2014 Thank you very much Nikhil for your explanation.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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13 June 2014 you are welcome friend......

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