Advice on LTCG Advantage / Disadvantage of buying TWO plot as a Joint Applicant or Single

AK47 1
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I need advice on buying two residential plots together. Should I buy them as: 1-Both plots in my name 2-Both plots jointly with my spouse as a second applicant 3-One plot in spouse name and one in my name.

The scenarios can be: 1-We sell one plot or house and keep other and have LTCG. 2-We sell both plot or house and have LTCG. 3-We make house on both the plot and use as a family. 4-We use one house and keep other vacant- will there be notional tax? on rent that may have been earned if both the constructed house are in my name alone.

Which one will be the best tax efficient option in a longer term- excluding the tax rebate on the loan interest. Asuming that we buy another house/flat/land etc from the CAPITAL Gains.

There is no plot / house in my as well as spouse name. Also all the plot payment & construction is done by me and there is no contribution from plot second applicant.

co-applicant joint-owner residential-plot long-term-gains capital-gains ltcg
1 Answers

If whole payment towards plot purchase and construction, then whole capital gains (when you sell it) would be applicable to you only.

Even if on paper, there is a co-applicant, gains are actually dividing on basis of purchase cost share. If one person pays 100% towards cost, gains would be 100% applicable to him.

So, on this case, it won't make much of the difference who owns what.

If your wife is working and has income, you can buy one property on her name. You can transfer amount to her as a loan, which can pay back with her income. In this case, she may show capital gains which won't be taxable to you, but on her side only.

As of now, if you own more than one houses and these are not given on rent, you have to pay tax for the notional rental income. Direct Tax Code, which would be applicable from April, 2012, is removing tax on notional rent.

Pankaj Batra5212
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