Exemption on Long term capital gain on selling property

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  1. sppatel777

    sppatel777 New Member

    I am holding house with value of 20 lacs since 2012.
    Now i am planning to sell it out and also planning to purchase new house at another place.

    Now i have 2 questions,

    1. If i will sell my house in 30 lacs do i need to invest full amount (30 lacs) to get exemption in long term capital gain tax or only profit amount (30-20=10 lacs) ?
    2. I have purchase new house within one year of selling of old house OR it should be before completion of financial year?

    Please reply to my queries.

    Thanks in advance.

    INVESTURU Member

  3. V K Khanna

    V K Khanna Active Member

    You have to invest only capital gains to claim exemption from tax u/S 54.

    2. The purchase of a new residential house has to be completed within a period of one year from the date of transfer of the old property.
    sppatel777 likes this.
  4. sppatel777

    sppatel777 New Member

    Thank you Sir for your help.

    Further I would like to ask that my existing property is having joint name of myself and my wife. And for new property I want to purchase in my name only.

    So while selling of old property is it possible that I should split payment and receive 20 lacs on my name and 10 lacs on my wife name to avoid capital gain on her account.

    Please clarify.
  5. V K Khanna

    V K Khanna Active Member

    Joint ownership of property does not imply that each person will have equal share in the sale proceeds of the asset. Sharing of the sale proceeds will depend upon the the percentage of investment made by each owner in the purchase of the existing asset.

    If you are investing your share of the existing property in the purchase of the new asset, the capital gains which your wife will get but not invested in the purchase of the new asset, will be subject to capital gain tax in her hands.
    ZED and sppatel777 like this.
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