Capital gain on sale of property

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.

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 .