Whether This Transaction Will Save Capital Gains Tax

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This query is : Resolved

Janu Singh (Querist)

19 February 2011 I have a client who wants to sell his house in Delhi. The Value of the house is Rs 9 Crores. The house has Joint owners who have 50% share each in house. So i can say that each will get Rs 4.5 Crores as their share from sale of property. Now both the owners want to shift to Mumbai and but 4 flats worth Rs 50 Lakhs each. That means each owner will spend around Rs 2 Crores on buying the flats. Now the promblem is as follows: -

(1.) Whether each owner can buy more than one flat from the money they got from sale of property. I mean can we sell one unit and buy multiple units in the name of single owner and still get exemption under Income Tax. The two owners will buy in total 8 Flats i.e. 4 Flats each.

(2.) They will keep balance money of Rs 5 Crores in NABRAD bonds for 3 Years. Now if they take out money from bonds after 3 Years and invest it somewhere else (not in House Property), then is that money taxable in the hands of the owner??

An early response is expected..

Guest

Guest (Expert)

20 February 2011 Investment in 4 flats will not be exempted but investment in specified securities will be eligible for exemption.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

10 October 2021 If the flats are on same floor, adjoining each other, it can be treated as single house property.
& hence exemption u/s. 54 will be allowed.

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