capital gain tax through reinvestment

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  1. abhishekjamkhande

    abhishekjamkhande New Member

    Me and my father currently own a flat. My father is owner and i am co-owner in property. Property is 4 yrs old from date of agreement and we got possesion 2 years ago. We have sold current property and want to buy a new property. Does Capital gain from sale of property will be consider as long term gain or short term gain?

    Now, All the payments in current property are made on name of my father. I am purchasing a new property by taking a home loan jointly with my wife and i have to borrow all d money raised by selling previous property from my father. Its like, my father are investing into new property through me. So does capital gain tax can be exempted in this case or i have make him also a co-owner in new property along with my wife?
  2. Parul_Gupta

    Parul_Gupta Active Member

    1. The Date of Agreement would be considered as the Date of Purchase. As it has been held for more than 3 years from the date of Agreement, therefore - it would be classified as a Long Term Capital Gain.

    2. To claim exemption under Section 54, the person who has sold the property should bimself buy a new property. Therefore, your father would be required to purchase a residential property. You can either include him as a co-owner or buy another property on his name.

    PS: At the time of sale of old property - the sale consideration should be received by the co-owners in proportion to their stake in the property.
  3. abhishekjamkhande

    abhishekjamkhande New Member

    Thank you very much
  4. abhishekjamkhande

    abhishekjamkhande New Member

    Dear madam,
    I have a continued query related to my earlier question. Suppose my father gifted all the payment came from selling earlier property to me and i invested all the payment in another property without making him ( my father) co-owner in the new property. Then in this case, does my father will get an exemption for capital gain tax??
  5. Parul_Gupta

    Parul_Gupta Active Member

    No, in such a case your father will not get Capital Gains Exemption.

    To claim Capital Gains Exemption, the new property should be purchased in the name of the person who has sold the property.

    In your case - as the property has been sold by your father and purchased by you - therefore exemption wont be allowed. To claim the exemption - the property should be purchased in the name of your father.
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