Capital Gains in case of inheritance of house property
This query is : Resolved
29 June 2011
My father, who expired this year in May, owned a DDA flat in Delhi(purchased in the 1980s). He is survived by three: me, my mother and brother. We wish to sell this flat and use the proceeds to purchase a residential flat in Bombay. I understand that we will have to get the flat mutated on our name before sale.
I want to know the following:
1. Whether the holding period for the purpose of calcuting capital gains will be considered from the 1980s (the time when my father originally purchased the flat) or from the date mutation happens (i.e. 2011)
2. Whether exemption under Section 54 of Income Tax Act will be applicable if we buy a flat in 2011 using the proceeds from sale of the DDA flat. (will sale in Delhi and buying in Bombay have any bearing)
3. On whose name shall the flat be mutated from the point of view of getting exemption under Section 54:
a. Myself: After mutating in my name if I sell the flat in Delhi and buy one in Bombay jointly in my and my husband's name will i still get the exemption.
b.My mother: After mutating in my mother's name and sell it. And use the proceeds to buy a flat which is jointly owned by my mother, me, and my husband? In this case will my mother still get the exemption?
I want to know the following:
1. Whether the holding period for the purpose of calcuting capital gains will be considered from the 1980s (the time when my father originally purchased the flat) or from the date mutation happens (i.e. 2011)
2. Whether exemption under Section 54 of Income Tax Act will be applicable if we buy a flat in 2011 using the proceeds from sale of the DDA flat. (will sale in Delhi and buying in Bombay have any bearing)
3. On whose name shall the flat be mutated from the point of view of getting exemption under Section 54:
a. Myself: After mutating in my name if I sell the flat in Delhi and buy one in Bombay jointly in my and my husband's name will i still get the exemption.
b.My mother: After mutating in my mother's name and sell it. And use the proceeds to buy a flat which is jointly owned by my mother, me, and my husband? In this case will my mother still get the exemption?
30 June 2011
I suppose that there is no will
In such a case as per succession law the flat in delhi will become joint porop of u , ur brother and mother.
Now i reply ur queries
1. Yes from 1980
2. yes place dose not matter
3. i already replied
4.&5. u will get ex proportionately. U can not get the flat in delhi as a sole owner unles others revoke their rights in the flat in ur favour
CA MANOJ GUPTA
JODHPUR
09828510543
gm2104@gmail.com
5.
In such a case as per succession law the flat in delhi will become joint porop of u , ur brother and mother.
Now i reply ur queries
1. Yes from 1980
2. yes place dose not matter
3. i already replied
4.&5. u will get ex proportionately. U can not get the flat in delhi as a sole owner unles others revoke their rights in the flat in ur favour
CA MANOJ GUPTA
JODHPUR
09828510543
gm2104@gmail.com
5.
30 June 2011
Hi Manoj,
Thanks for your prompt reply. You've mentioned that exemption under section 54 is available proportionately.
1. So in the current situation if the delhi flat is transferred solely in my name and i buy bombay flat jointly with my husband, the amount exempted will be half of the total capital gain made by me.
2. Also in case we transfer the delhi flat jointly in my mother's and my name then use the proceeds to buy bombay flat jointly with my husband and mother then the amount exempted will be 1/3 rd of the capital gain, and 1/3 rd of the amount will be exempted to my mother. We will have to pay tax at the rate of 20% on the remaining amount. Also, the remaining amount can be invested in govt. approved bonds for this purpose to save tax. Is my understanding correct.
Thanks for your prompt reply. You've mentioned that exemption under section 54 is available proportionately.
1. So in the current situation if the delhi flat is transferred solely in my name and i buy bombay flat jointly with my husband, the amount exempted will be half of the total capital gain made by me.
2. Also in case we transfer the delhi flat jointly in my mother's and my name then use the proceeds to buy bombay flat jointly with my husband and mother then the amount exempted will be 1/3 rd of the capital gain, and 1/3 rd of the amount will be exempted to my mother. We will have to pay tax at the rate of 20% on the remaining amount. Also, the remaining amount can be invested in govt. approved bonds for this purpose to save tax. Is my understanding correct.
03 July 2011
1. There are case laws which can help you in the situation described by you.
2.Issue needs closer scrutiny before arriving at any conclusion.
Anuj
091-9810106211
2.Issue needs closer scrutiny before arriving at any conclusion.
Anuj
091-9810106211
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