Capital gain tax

Question

Dear Pankaj,

I have sold an old flat in my and mother name for 10L, i have invested 2.11 L in plot on my wife name. i wish to invest the balance amount in my name for a under construction property. following r my queries.

Will my mother have to pay long term capital gain tax.

If i will not be able to invest the full amount within year in the under construction property will i be liable for capital gain tax.

Since the small plot is in my wife name will i be able to claim its deduction for capital gain tax.

Pankaj Batra · Accepted Answer

All stake holder of old flat will incur capital gains and they have to pay income tax on that or invest to tax saving individually.

As your mother was also co-owner in old flat, capital gain will be divided among all owners in ownership ratio. Your mother will have to pay income tax on her share of capital gains.

You will have to invest only your gain part (not full selling price) into a new property within two years of sale of old flat. You must get possession of new property within two years. The amount should be utilized before income tax return filing, else it has to be invested into capital gain accounts scheme.

There is no exemption available on buying a plot and also exemption cannot be claimed for property bought on wife's name. New property must be residential (house/flat/floor/apartment) and it has to be on same person's name who have gained from selling old property.

Capital gain tax

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