My mother wants to buy capital gain tax saving bonds (NHAI/REC) to avoid long term capital gain tax incurred by selling a land in Sept 2017 (land was bought in May 2006). I want to know whether me or my wife can be the first applicant and my mother second applicant when buying capital gain tax saving bonds?
2 Answers
Hi,
I believe that should be fine (investment in joint names).
Exemption in case bonds purchased in joint name: Where the investment in bonds for claiming exemption was made in joint name it was held that there was no requirement in the section that the investment should be in the name of the assessee. The object of insertion of section 54EC was to give an incentive to the development of infrastructure. In 2001 the section was widened to include bonds issued by Rural Electrification Corporation Ltd. If development of infrastructure was the object, it would not matter whether the investment was made in the name of the assessee exclusively or in the joint names of the assessee and somebody else. The only condition was that the funds used for the investment must be traceable to the sale proceeds of the capital asset.
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