Long term capital gain on sale of Flat Purchased in Wife's Name

Dear Sir, Please help me the following case. Sold a flat (flat1) purchased in wife's name. Flat was fully funded by me. Capital gain comes around 30 lakhs. Want to invest in a new flat (flat2) to save long term capital gain. New flat (flat2) is going to cost around 65 Lakhs. Wife is housewife and has no income. I was earlier clubbing the rental income (from Flat1) in my income and paying taxes accordingly. Question is: 1) the new flat (Flat2) should be purchased in wife's name or it can be in joint name or it has to be in my name. 2) Also in IT return in whose return form this capital gain should reflect. It should come in my ITR or in wife's ITR. (Wife has no income and not filing returns but has PAN card). Interested to purchase the new flat (Flat2) in joint name.

asked Jan 09 '13 at 10:33 by Deepak74 111

  1. Logically gains should be taxable to you only as it was financed by you. But as all sale proceeds would go into your wife's name and her PAN AIR records would reflect same in IT department database, it would be safe to buy new flat in joint name.
  2. You should declare capital gains into your ITR as you have been declaring rental income as well.

answered Jan 09 '13 at 20:16 by Pankaj Batra 5.2k320

Thank you so much for your reply. In case I wish to purchase capital gain tax saving bond (REC or NHAI), in whose name it should be purchased. In joint name or in wife's name.
(Jan 13 '13 at 19:52) Deepak74
You can buy capital gain bonds also under joint names.
(Jan 17 '13 at 00:49) Pankaj Batra

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Asked: Jan 09 '13 at 10:33

Seen: 2,498 times

Last updated: Jan 17 '13 at 00:49