Section 54 Exemption if Sale by Wife Purchase by Husband

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    RK AGRAWAL New Member

    I bought a plot in June 2010 on my wife ‘s name with a cost of Rs 220000/- and sold the same in Sept 2013 with a cost of Rs 483000/- and then I bought another plot on myself name in March 2014 with a cost of Rs 1350000/-

    Is any income tax payble on sold plot?

    will any detail of purchased plot ( in march 2014) be given to Income tax department ?
    Prashant Saraf likes this.
  2. Neha Sharma

    Neha Sharma Active Member

    Dear @RK AGRAWAL

    The new plot has been purchased on your name and not on your wife's name and therefore you cannot claim exemption under Section 54 and wont be required to disclose details of the new plot in your wife's income tax return.

    Moreover, you would be liable to pay Long Term Capital Gains Tax @ 20%
  3. Corporate Summit

    Corporate Summit New Member

    Deduction will be allowed only if sale and purchase is by same name.
    However, If property would have joint ownership of yours and your wife then you could have availed deduction.
    But in your case your wife if sole owner , so you cant avail deduction.
    You are not required to provide details of assets purchased because your wife is not involved from any point of view in such purchases.

    RK AGRAWAL New Member

    my wife is wholly depend on me and has no her income of any source. Inspite of this condition in above reference , is she required to pay Income tax as per her slab or the income from plot selling will be clubed wih my income?
  5. Praveen M

    Praveen M New Member

    Sir you can if you proved that the money for purchasing the said plot(June 2010) is given by you..
  6. jagmohan singh

    jagmohan singh New Member

    First of all, I would like to clarify that there is no deduction u/s 54 in case of purchase of plot.There is deduction u/s 54 is only relating to investment in residential property and not in plot. Further, no deduction is allowed when the investment is made in the name of husband when the sale is made in the name of wife. But if the investment is made in house property by the assessee in joint name (with his/her spouse)and the entire payment is made by the assessee, then deduction is allowed u/s 54 as is held by various courts recently. one such case is CIT v Gurnam Singh 170 Taxman 160 (P & H). There are many other rulings on this.
  7. Praveen M

    Praveen M New Member

    Assumed that if there is house property instead of plot can the assessee claim deduction u/s 54...

    Note: the assessee paid the money to purchase the house property in the name of his wife.
    then what is the tax implication. whether is it same or differ???
  8. jagmohan singh

    jagmohan singh New Member

    In case the assessee paid the money but the residential property has been purchased in the name of his wife only, then no deduction is
    allowed since the name of the assessee is missing.
  9. Praveen M

    Praveen M New Member

    But section 27 talks about the deemed owner in which if the assessee transfers his property to his wife without adequate consideration the assessee becomes the deemed owner and any income(if assessee wife got rental income from that property) arising from said property is included in the hands of the assessee....
    Then transferring property to wife and purchase the proprty in the name of his wife is both r same if look its logically...

    If my thought is wrong direct me....
  10. Karan Batra

    Karan Batra Well-Known Member

    Dear @Praveen M

    You are right but for availing Capital Gains Exemption, Section 54 is applicable and Section 54 nowhere talks about deemed ownership.
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