Exemption u/sec 54

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 February 2012 I am planning to sell a Long Term house property held in my name and planning to buy another house property. I want to buy the new property in jointly with my wife and two brothers which means 4 joint owners in new property. I also do not want to mentioned the ownership ratio in the purchase deed of new house to avoid future dispute among the family members. Assuming Long term capital gain in my hand on sale of old house will be approx 50.00 Lacs and the cost of new house is Rs.100.00 Lacs and I shall invest Rs.55.00 Lacs from my account and Rs.15.00 Lacs each from my wife and brother's account.
Now my question is whether I will get the benefit of exemption for entire capital gain in U/Sec 54.

CA. Hari Kishan

CA. Hari Kishan (Expert)
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17 February 2012 The exemption shall be available only if the entire gain earned shall be re-invested into a new residential property. As you have mentioned that you shall make a gain of Rs.50 Lakhs, you shall reinvest this entire gain amount for purchase of the new house. Also to avoid any tax dispute i would suggest that you shall document it very clearly that your investment is for Rs.50 Lakhs.. else claim for exemption shall be questionable...