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Sale of property co-owned but was shown in just one co-owner

09 November 2013

Sir/Madam,

One property was co-owned by husband and wife which was purchased 20 yrs back. This property was disclosed in the books of husband only.

In the current year this property is sold,now my question is how treatment of sale will be given effect?

Should it be shown in both co-owners,the consideration which is received for the same?

If it is to be shown then,can the wife get benefit of cost of the property?

Are there any relevant case laws for this particular treatment?

Please reply asap.

Thanking You in Advance.

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7 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 10 November 2013

If the property was bought jointly by husband and wife, the sale agreement, too, has to be executed jointly, making both, the husband and wife, eligible for exemption u/s 54 for long term capital gains.

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CA Pallav Singhania (IT System Auditor) (33362 Points)
Replied 10 November 2013

Agree with Mihir Ji,

Both can avail exemption U/S 54 of the IT act...

Citation: INCOME TAX APPELLATE TRIBUNAL, DELHI ITA No. 4063/Del/11 - A.Yr. 2004-05 ACIT, Cir. 43(1

Vs. Shri Ashok Alexander

Shweta Punmia (CA) (190 Points)
Replied 10 November 2013

Sir,

I was not asking regarding exemption treatment.I am asking from the point of view of seller.Sellers were co-owners & now this property is sold so what treatment must be done?

CA Pallav Singhania (IT System Auditor) (33362 Points)
Replied 10 November 2013

Proportionate capital gain will be treated on the hands of both co-owners...

Either they can claim exemption or can pay tax @ 20 percent...

Shweta Punmia (CA) (190 Points)
Replied 10 November 2013

Sir,

The assessee does not want to disclose this sale transaction in the books of his wife.Is there any provision which says the property cannot be disclose in the books of just one co-owner? Is this treatment is wrong to just disclose in one co-owner?

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Mihir (Wealth Manager) (5293 Points)
Replied 11 November 2013

If the value of the property is above 50 lakhs, the buyer will have to deduct TDS u/s 194-IA at 1%. In the challan, the owners name has to be mentioned along with their proportionate share in the property. If this property is jointly owned by the husband and wife, both their names along with their PAN will have to be disclosed in the TDS challan, as both are owners of the same property.

Even if the sale agreement mentions only the name of the husband, society may show some concern as the flat is jointly owned by both husband and wife. You may recheck whether both the names are written on the share certificate or whether the wife is only an associate member in the flat.