Capital gain tax in joint property purchase

1108 views 2 replies

SRIKANTH

engineer

24 Points Posted on 08 March 2011

Hi,

I am purchasing a house, for which I am using 50% of the money generated by selling my father's property. Now, I will take a housing loan for the rest of the amount. So I have to register the house jointly in my father's and my name.

My question is: Will my father have to pay capital gains tax? I heard that if the money from sale of land/house, if invested in purchase of another house, will not be subject to this tax. Does the house have to be in a single owner's name only to avoid CG tax? Is the CG tax exemption available for a joint property purchase, as in this case?

Thanks,

Srikanth

Replies (2)

Pankaj Arora

Learner

3134 Points Posted on 08 March 2011

Yes you are heard right… you did not tell that is it STCG or LTCG well if its Long term capital gain after three years of purchase if you sell it will be capital gain………..

You have to invest entire amount in buying new house within two years of within 3 years of construction. If you could not buy house in next 6 months than you have to deposit this LTCG in any nationalized bank under capital gain scheme. Or any rest amount remaining after investing in buying new house it will be taxable. Nowhere mention is that house have to be in a single owner name to avoid tax….

AVIJIT

CA FINALIST

370 Points Posted on 08 March 2011

I agree with Pankaj excepting one point. As far I think if Your father is owner of 50% of the new property then only 50% of the cost will be eligible for exemption