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Long Term Capital Gain due to Land sale

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Tushar Hatwar

3 Points Posted on 26 February 2023

Dear Sir/Madam,

My father sold land property few days back. It was on his name. We sold it so as to transfer amount to my SBI Home Loan as I had purchased Flat few months back. My Father's CA didn't guided him properly earlier while my CA gave below points.

- for tax exception, Put Father's name in SBI Home Loan (Manager refused saying loan is already sanctioned and 90% amount is disbursed). SBI loan is on my and spouse name.

- for tax exception, invest in Bonds (lock in period: 5 years) limited up to 50 Lakhs

- for tax exception, Buy House property on Father's name within 3 years (not possible due to father health issues)

- to pay 20% tax on Long term capital gain and send remaining amount to my SBI Home Loan.

Could you please suggest if there is any solution to get tax exemption other than above.

Thanks & Regards

Replies (4)

Quick Summary

A father sold land and is looking for ways to minimise the long-term capital gains tax. Options discussed include investing in bonds, buying a new property, or transferring the home loan to another bank to add the father as a co-borrower. The sale of a portion of the son's new flat to the father was also suggested as a potential tax-saving strategy.

CA Raj Doshi

Practising CA

8954 Points Posted on 27 February 2023

Son to sell some percentage of new flat to father. Accordingly father will invest in new property for tax exemption ( father will pay money to Son as per sale agreement between them )

Son to pay capital gain tax,if any. I have assumed Son has bought home recently. And father has sold land which is not a rural agricultural land in India as defined in Income tax act.

Tushar Hatwar

3 Points Posted on 27 February 2023

Thank you Sir for your suggestion!

Father has sold land in city. For Flat, registry is expected in mid 2023 when builder give possession but Son have SBI home loan. Without loan closure and NOC from bank, I understand that flat may not be sold.

I guess other option could be to transfer home loan to other bank and add Father as co-borrower as SBI is not allowing to add Father as co borrower.

Could you please provide suggestion when possible.