Investment out of proceeds recd. fm sale of unlisted shares

Tax planning 821 views 3 replies

Naman

Director - Partner

29 Points Joined January 2011

Mr. X has recd. 2.5 cr out of sales of shares of a privately held company(unlisted)& these shares are in name of 3 people of a family..Kindly tell me whether..

1) Indexation can be applied here..

2) If the entire amount is invested in residential property & the original shares are in name of 3 people, how many properties can one buy..one for each ?

3) If the property is not at the same value for all the involved people, can one be bought for higher amount by using up part money of the other two ?

4) Can more than one property be bought in one name?

5) If 2 cr are invested in house & rest 50 lacs in nhai/rec, will the 2 cr be taxed as partial investment??

Replies (3)

S Sivasalapathy

Job

262 Points Joined February 2009

1) Indexation is applied

2) The entire amount can be invested in only one residential property U/S 54F. But you can Invest in REC & NHAI U/S 54EC Upto Rs.50 lakhs.

3) Yes

4) More than one residential house property should not bought in one name.

5) The 2 cr will be taxed as partial investment.

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

Mr. X has recd. 2.5 cr out of sales of shares of a privately held company(unlisted)& these shares are in name of 3 people of a family..Kindly tell me whether..

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before any conclusion, some clarifications .........

who is mr X? seller of the shares?

shares held jointly in names of X+Y+Z? or severally in names of X and Y and Z , if severally then what ratio?

Naman

Director - Partner

29 Points Joined January 2011

I am still not clear...Say if X gets 100L / Y - 80L & Z - 70Lac = 2.5 cr out of the proceeds, Can Indexation be applied & the indexed money(free money) be utilized to buy any other things, other than house/bonds?

Partial Investment asin if X invests out of 100 lacs, 40L in bonds & 60L in property...would 60L be considered as partial investment & tax to be paid on it??

Say if X wants to buy a home of 1.5 cr but he has only 1 cr to spend, can Y lend 50 out of his 80lac as they plan to share the same house in future(family) though the property remains in X's name only & also buy a smaller house from the remainder 30Lacs?

Also if X & Y want to invest other money which is fm their earlier savings in buying a 2nd home apart from the compulsory buying of homes out of the sale of shares..can they buy it as it would imply they would own 2 homes each w/t any i-tax hassles?