13 October 2012
My wife and I jointly bought a property for 50 lacs in 2010. We are now planing to sell it for 75 lacs. How will the short term capital gains be taxed? will each of us be liable for only tax on 12.5 lacs? Further, is there any expense or loss we can offset against this income? Thanks
13 October 2012
First of all, on such transfer, short term capital gain will arise. Deduction will be given from sale consideration for cost of acquisition, any brokerage paid, expenses in regards to any capital improvement, registration expenses, and other expenses of transfer. So computed capital gain will be added to you and your wife's income in the ratio of your share in the property.
13 October 2012
But division of capital gain will be done only when if your wife used her own income for the purchase of such property. Ie such amount for purchase was not rooted through your income directly or indirectly.
13 October 2012
60% of the acquisition cost came from my wifes account and 40% from mine. Does this mean the capital gains will be applied 60% to her income and 40% to mine? we own the property jointly- does this mean it will be 50:50? Thanks
18 October 2012
Thank you for your responses. Any inputs on the second part of my question: can the short term capital gains be offset against any expense or losses?
20 October 2012
so if i have a short term capital loss in shares or derivatives, can that be used to offset the short term capital gains on the property? Thanks
CAclubindia
