manish (author) (68 Points)
19 March 2011Dear friends,
a residential house is sold by joint owners (two persons).
can they invest the capital gains in two different properties (both prop. to be purchased in joint names)
is it compulsory to open the capital gains account immediately or
can it be opened before the last date of filing ITR?
if it is nt compulsory to open it immediately then can the proceeds be kept in a savings account and
whether the money could be used for personal purposes for a short period?
regards
Manish
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 19 March 2011
| Originally posted by : manish | ||
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- cap gain tax is to be treated in seperate PAN numbers with proportionate share in property sold so the treatment of tax and rule 54 will apply seperately in both PAN assessess.
- they can buy seperate properties or joint does not matter, provided they use the entire capital gain towards purchase of new property ( joint or separate does not matter)
- advised to open immediately, - 180 days or late due date for filing of ITR whichever comes 1st.
- savings account interest would be taxed as per slab. - it may cause disallowance of capital gain benefit if AO finds the transaction.
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manish
(author)
(68 Points)
Replied 19 March 2011
Dear Mr. Sharma,
Thank you very much for the prompt reply.
Sorry to seek further clarifications.
I have been told by some friends that capital gains could be invested only in one house and
not more than one. That is why the question of joint ownership.
Secondly, the transaction was completed in July 2010 (i.e. in F.Y. 2010-11)
The money was to be utilized for purchase of house before due date of filing of return, i.e.,
31.07.2011. So, immediately the money was deposited in joint savings account.
During the interregnum period, the capital gains (35 lacs) was utlized as follows :-
1. Flat booked in Noida (Cost 13 lacs) : 12 lacs paid
2. Flat booked in Gurgaon (Cost 30 lacs) : 5 lacs paid
3. The balance was kept in FDR to be matured in mid July 2011.
4. Rs. 2 lacs were given as loan to one of the sons of assessee which would be
refunded by him in June 2011.
5. In July 2011, the assessees would like to open Capital Gains Account
and deposit the balance amount in that
U have mentioned that within 180 days, the account must be opened.
if it could not be done, then what are consequences
regards
manish
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 19 March 2011
| Originally posted by : manish | ||
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- capital gains are taxed in hands of individual, hence per pan lmit is not more than one. - capital gains schemes have nothing diff than FDR, except the obligation to intimate the banking officer the purpose in writing. you had to deposit the same in cap gain account for your sure satisfaction.
- use of cap gains in other places can disqualify the assesee to avail the exemption.
5. In July 2011, the assessees would like to open Capital Gains Account
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Too much calculations in such cases create the disaster, govt has allowed exemption on the belif that assesee has to get a new home with the capital gains so govt allows exemption, now if assesee play games and tricks in the time period to get more and more ...........
rem the capital gain proceeds are to be reported in your return in quarterwise frame, with details so the AO has clear view of funds in hand, and if he gets that assesee has used the funds anywhere else , except the aquiring a new residential property ( in delay , deposit the same in cap gain account) then its power to AO to disallow the whole cap gains utilized elsewhere.
rules are made to pay relief to the actual taxpayers, not for the gamespeculation.
S K
(Arch)
(27 Points)
Replied 21 April 2011
I have purchased a residential plot (Land) in my home town in year 2000. Which I am planning to sell this year (FY 2011-12).
I have two question. What will be Tax rate applicable, with and without indexation.
Is there any way I can save the tax on long term Capital gains (like specified Bonds) and How do I buy these bonds. Can I invest this money in a house/flat to take benefit of tax.
Regards,
Sunil
SSB
(consultant)
(21 Points)
Replied 02 May 2011
Dear Mr Sharma,
Further to Manish's question above I have a query if you could please help clarify:
1. if the original property was held jointly and the entire proceeds are now invested in another residential property in the names of the original joint owners, but an additional owner name is added as a joint owner in the new property, would there be any implications on the capital gains for the original joint owners, or would any new tax liability be created for the 3rd (new) joint owner.
2. Also, would it matter if the 3rd (new) joint owner is an NRI.
Regards
SSB
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 02 May 2011
registration instrument clearly mention the percentage of property in all cases, so the sum used by joint holers of old property is to be taken in account and the share of 3rd holder would be additional with fresh intake of capital inflow towards the cost of new property.
i.e if the total proceeds of last sale in name of two persons is 200/ and they want to add a new co owner then total three persons are there and if equally shared then new property would be of 300 or more out of which 200 or more is contributed by the previous owners.
hardik
(articel)
(21 Points)
Replied 14 December 2011
If I hv sold a property and deposited the gains in a normal savings account not mentioning it for capital gain account but I have used the whole gain for purchase and construction of a house. Will I be eligible For exemption under section 54 or not be given the exemption for depositing it in a normal savings account and not mentioning it is for capital gian account. Plz let me know the same along wit a case if any. And also any alternative if not allowed the exemption. Thank you
CAclubindia
