Capital gain on sale of property

Tax queries 255 views 2 replies

Anupam

Finance Professional

61 Points Joined August 2015

Hi,

I have purchased a residential Flat worth 62 lacs in joint name with my mother in July 2015 (me being the 1st owner)

Now my mother sold out a residential property that was solely on her name worth 49 lacs. (Capital gain amounts to 25 lacs after indexation)

Further details: New Flat Cos – 62 lacs we paid 17 lacs from own fund and the remaining contribution is through bank loan of 45 lacs (loan is on joint name)

Please let me know what are the tax implication, will there be any capital gain tax?

Thanks

Replies (2)

From the above, the holding period is less than 3 years and the difference between sale price and purchase price is taxable as short term capital gains under normal rates and benefit of indexation is not available. Proportionate Interest on Loan can be claimed till the date of sale.

Ankit Taprania

CA FINAL

547 Points Joined September 2009

There will be NO CAPIAL GAIN .

say you and she have 50% : 50% ownership agreement . i.e her investment in new house will be exceeding 25 lakh , that means the entire capial gain will get exempted u/s 54 .

section 54 , only stipulates that investment has to be made in residential house , it nowhere says that whole investment in the residential house should be made by the assesse only . as long as her part of investment exceeds capital gain she is safe.

BUT make sure that her investment ( fund plus loan repayment ) exceeds 25 lakh of EITHER ONE of the house .