I had purchased the shop 5 years back with the having the total purchase consideration of Rs 20 Lacs [Rs 10 Lacs each] jointly owned with my wife. Note that the entire shop was used for my business activity and hence the same was shown as business asset and depreciation was claimed in my books. The depreciated value of the shop is Rs 4.0 Lacs in the books as on date.
My wife had shown the her share of asset as Investment in Property and is shown at the original cost in Wife's Balance Sheet. In addition, fair rent of Rs 1,35,000 was paid annually to my wife for using the 50% share of property which belongs to her for last 3 years.
Both Joint owner's share in property was gifted to the son before a month. However, Post 1 month the shop is agreed to be sold by the Son at the sale consideration of Rs 35,00,000/- and the entire sale consideration is planned to be invested in the House Property. Kindly confirm if the Gain can be classified as Long term capital Gains and benefit of Section 54F can be taken if the condition of holding only 1 residential property is satisfied?
CAclubindia
