Capital gainss

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This query is : Resolved

Ram (Querist)

01 March 2012 My brother-in-law has sold a plot of land (residential - owning for more than 5 years) for Rs.12.00 Lacs in Bangalore in May 2011. Now my query is:

1) How much capital gains tax he has to pay if does not want to invest the money for property?
2) Can he buy a property in joint name i.e., along with his spouse?
3) Can he give that money to his spouse for constructing a house as a gift? (the plot is in his spouse's name)
4)What is the time frame for paying tax if the money is not utilised for buying new property?
5) Can he spend that money for renovation/alteration of his existing house and still claim capital gains exemption?
Thanks a lot for an early response
Ram

Prasad Modak

Prasad Modak (Expert)

01 March 2012 Dear Mr Ram,
There are few more things required to assess the case, like date of purchase of a plot, amount of purchase, nature of plot of land (Agri/NA), ownership of the plot of land, etc. However, your queries are answered on the basis of applicability of IT Act, at the moment:

1) Capital Gains - the amount of tax liability can be determined only if the above asked information is available.
2) Purchase of property in Joint name - yes possible (but original owner has to be one among the joint owners), but nature of property (for tax exemption) can be decided only on the basis of above asked info.
3) money to spouse for construction of house - the info provided is not sufficient to answer the query.
4) time frame to pay the tax - The capital gain tax, if any, worked out shall be paid during the financial year of sale of asset, in the form of advance tax (i.e. on or before 15/09, 15/12 and 15/03 30%, 30% and 40% respectively of annual tax liability assuming that tax liability is more than Rs.5,000/-)
5) renovation/alteration - no money spent on renovation/alteration of existing house, will not be eligible for the tax exemption.

With regards,

CA Prasad Modak