This is a case where a mother and her son sold 2 properties each and purchased one property jointly. How will long term capital gains be treated.
Case in detail:
1. Mother : Senior Citizen sold 2 commercial properties during the FY 2012-13. Capital gains on this amounts to about 10 lacs. One of these properties belonged to her late husband, who died without leaving a will behind.
2. Son : Indian resident sold 1 commercial property and 1 residential property during the year FY 2012-13. Capital gains on this amounts to around 10 lacs. One of these properties belonged to his late father, who died without leaving a will behind.
3. Mother and son jointly purchase a residential property, to be registered during FY 2013-14. Their purchase will be financed as under:
Mother's contribution in cash - 15 lacs
Son's contribution in cash - 20 lacs
Home loan by Son - 10 lacs.
Queries:
A. Can Mother and Son claim LTCG benefit on the properties sold by them? If yes, then to what extend...
B. Is it necessary to specify the %age of share individually in the purchased property.
Bi. If yes, then what % can be allotted to wife as 3rd holder, though she is not making any investments in the new property.
C. If the property is rented out, whose hands and in what ratio will the income be treated.
D. Will Son be entitled to 100% benefits for home loan principal repayment under chapter VIA of IT Act if he is repaying EMIs through his own resources.
E. What will the ratio in which Son can take benefit for interest paid on HL under IT act for the newly acquired property.
Thanking the knowledged members of this great forum, in advance and looking for a speedy answer.
CAclubindia
