Long Term Capital Gain Tax

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  1. Arulzam

    Arulzam New Member

    Long term Capital Gain tax Property

    Hi

    I have sold a commercial shop and a residential flat which are on my name.
    And
    My dad too has sold a commercial shop and a residential flat on his name.
    And
    now we jointly want to buy 2 big flats.
    1)Are we eligible to buy 2 flats jointly to get long term capital gain tax exemption or do we have to buy one flat jointly since it is said that the LTCG can be invested in only one property and not more than one but since we have sold 2 property each can we get the exemption?
    2)Secondly we jointly already own 2 flats .. It is said that exemption is not valid on 54F if a person holds more than one flat in his name whether jointly or solely.
    3)Thirdly or do we have to process the LTCG separately like the residential flats under 54 and commercial shop under 54F
    4)If LTCG is not exempted to us in all the above would u recommend 54EC bonds for both of us individually.?
    Thanks
     
  2. ZED

    ZED Well-Known Member

    Both of you can invest only in a single residential house property only. Joint ownership shall also be restricted to only one residential house and therefore, you can not have 2 properties under co-ownership.
    Either both of you buy a property individually or if you have to opt for co-ownership then opt it only for single residential house property. [Plus read the reply to the next point in conjunction with this reply.]


    Yes. But for S.54 , there is no such condition.
    You may opt for S.54EC for gain on commercial property if 6 months hasnot lapsed since the date of transfer.


    Computation will have to do separately only. But if you have more than one residential house (other than the new one) then you are not eligible for exemption U/S.54F.
    Try 54EC. Its a good option.



    54EC has to be opted individually only.
     
  3. Arulzam

    Arulzam New Member

    Is it possible if we invest half in bonds and half in new residential flat?
    What I mean is:-
    1) LCGT arising out of the commercial shop be invested in 54Ec bonds (since we own more than one flat we are not eligible for 54F and we can't opt for Sec 54 as it is commercial & not residential flat)

    And the 2) LCGT arising out of the residential flat be invested in one flat jointly with my dad (Sec 54)
    Is it okay ?
     
    Last edited: Jul 15, 2016
  4. Arulzam

    Arulzam New Member

    3) And also while taken exemption under 54EC bond for the commercial shop .. Do we have to invest LTCG or the Entire sales proceed?
     
  5. ZED

    ZED Well-Known Member

    It is OK.

    Only capital gain amount needs to be invested.
     
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