Dear Sir
My father-in-law is a senior citizen (retired 68 years age) wants to sell his existing property and intends to jointly invest along with his elder daughter in a new property. The existing property is 20 years old and the long term capital gains calculation is as follows:- Purchase Cost = Rs 3 Lacs; Purchase Year = 1993; CII (1992-93) = 223; Selling Price = Rs 27 Lacs; Sale Year = 2012; CII (2011-12) = 785; Indexed Purchase Price = 3785/223 = Rs 10.56 Lacs; Long Term Capital Gain = 27 - 10.56 = Rs 16.43 Lacs; Income Tax on Capital Gains = 20%16.43 = Rs 3.28 Lacs.
He wishes to avail exemption of the LTCG tax by investing around Rs 18 Lacs (i.e., greater than LTCG) in the new property. However he is faced with a problem which is cashflow. The new property is priced around Rs 35 Lacs. His elder daughter is employed and is eligible for a Loan Sanction of maximum Rs 20 Lacs. To transact for the new property they (father & daughter) need to approach a bank for a home loan. However the banks are declining to give loan to joint applicants (in this case one employed and one retired). Even considering they jointly fund an initial equity of 15% of Rs 35 Lacs = Rs 5.25 Lacs, they still need a loan sanction of close to Rs 30 Lacs. Currently they are unable to do any of transactions.
Is it possible to open a Capital Gains Account and seek a loan for the balance portion [Rs 30 Lacs less Rs 20 Lacs eligibility of employed daughter] i.e., Rs 10 Lacs. Otherwise can someone please advise how to proceed in this regard. What can be his possible way to transact or deal with the situation. How can he invest in the new property as a joint owner.
Thanks & Regards Satyaki Basu
