LTCG on sale of plot for joint owners

Dear friends,

A & B were allotted a residential plot in February 2007.  (registry still not done).  They sell the plot in May 2010 for an amount of Rs. 1 crore.

How should they proceed further in order to avoid LTCG ?

Suppose A&B decide to purchase a residential plot costing Rs. 1 crore (in joint names).  Whether they would be still liable to LTCG or they will have to do construction on the plot within three years?

If construction is a must to save LTCG, then how much construction? 

 Since the entire sale consideration has already been invested in the cost of the plot, whether A or B can do construction from his own funds?

please reply accordingly to the above questions.

thanks in advance

manish 

Replies (2)

In your case you got 2 options

1. U/s 54 EC amount invested in the specified bonds issued by REC or NABARD can be claimed as exemption for LTCG.They should be invested within 6 months of transfer to claim exemption.

2.U/s 54 F within a period of 1 year before or 2 years after the date of transfer, a residential house is to be  purchased or within a period of 3 years after the date of transfer a residential house is to be constructed.

The cost of new residential house or LTCG whichever is lower is exempt from tax.

So simply purchasing a plot is not enough to get exemption.

If you purchase/sell any property in joint names, the percentage of share is considered.

For claiming exemption there is no restriction to invest own funds.

Thats your convenience, you can invest even debt funds.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 01 October 2026
Articled Assistant

KPSN & Associates LLP

Chennai

CA Inter

View Details
Company
08 October 2026
Accounts and Tax Associate

POOJA R TELI & CO

Pune

CA Inter

View Details
Company
16 October 2026
CA article trainee

Zerdi & Co. Chartered Accountants

Pune

CA Inter

View Details
Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details
Company
12 October 2026
Finance

I-Genext Consulting Private Limited

New Delhi

CA

View Details
Company
Featured ARTICLESHIP 06 October 2026
Semi Qualified

AJAY SINGH AND CO LLP

Thane

CA Final

View Details
Company
06 October 2026
Assistant Manager - Audit and Compliance

Ravi K Jain & Co

Noida

Others

View Details
Company
22 September 2026
Account Assistant

Chirag P Shah & Co. Chartered Accountant

Pune

B.Com

View Details