My query is related to Long term capital gain on sale of property.
1) Mr A has purchased 2 adjacent flats in March 2021 in joint ownership with his wife. He combined two flats and made as one flat with one kitchen. The society issues two separate maintenance bills for each flat.
He has sold his 1 flat, which was in joint ownership with his Mother Mrs B, in December 2021. Thus, he is eligible for claiming capital gain tax exemption u/s 54 as the 2 flats were purchased by him 1 year before this sale.
In old property, which was sold, The mother's name was added to take the benefit of lower interest housing loan which was given to woman borrower. But the housing loan repayment was made by Mr A only.
So my questions here are that: 1) Can we show 2 adjacent flats as one home purchased against sale of the property for Mr.A??
2) Can we consider share of Mrs B in flat as 5% only while calculating the capital gain, as she was joint owner for namesake??
3) or its okay if we show entire transaction in Mr. A's return only, without showing anything in the return of Mrs B, though her name was there in both the purchase & sale agreement of old property.
The same Mr A is selling his ancenstral property now and investing in another new house. Can he claim capital gain tax exemption on this sale also, being a separate trasanction??
01 February 2022
1 yes, there are various judicial pronouncements which have held the exemption u/s 54 / 54F was to be allowed in respect of investments in two adjacent or contiguous units converted into one residential house by having common passage / stair-case, common kitchen, etc. intended to be used as single house for the residence of the family. 2 yes. 3 It's okay. Yes, it's allowed as separate transaction.
02 February 2022
Sir, I have another query in this. Suppose long term capital GAIN in sale of Property 1 is Rs. 200000/- and long term capital LOSS in sale of property 2 is Rs. 150000/-, then Net Gain would be Rs. 50000/-.
So my query is that: investment u/s 54EC i.e. investments in specified bonds would be of Rs. 50000/- or of Rs. 200000/-???
02 February 2022
Sir, does the 1st name & 2nd name in the agreement play major role in claiming capital gain exemption u/s 54?? I mean, Mr A keeps his wife's name Mrs A as 1st name and his name as 2nd and he only takes loan or pays for new flat out of his salary / savings, Wife's name is for namesake. Then, does name of Mrs A as first owner create any problem? Can Mr A claim entire exemption?
CAclubindia
