Dear Sir,
I need your expert advice on the following points:
- Property was purchased in joint Mom and Dad name in 1995, and now in 2018 the plan is to sale it. Due to new budget, the CII base year is 2001, so how do we find out the capital gains on the property. Purchase price of flat was 10lakh. Now we plan to sell it for 80L.
- Before selling the flat, Mom and Dad wants to gift that flat to 2 sons, so that property can be sold, and proceeds gets distributed equally to 2 sons, and both sons can use the proceeds to invest in 1 new flat each for both of them. Can proceeds of sale of 1 property jointly own, can be used to buy 2 new properties , one for each and not jointly owned?
- Both sons have already invested in underconstruction apartment project, 1 flat each in Sep 2017, with installments till 2020. Can sale of old property that might happen in June-July 2018, can be used to invest in underconstruction property installments to be paid till 2020? How do we tackle this? To save LTCG tax in sale of old property, can that be used in booking already done in Sep 2017, which is new project launch and the project is underconstruction and will be ready by 2020. Kindly advice.
1 Answers
Hi,
1 - As the year of acquisition was before FY 2001-02, the purchase price can be considered at ‘Fair market value (FMV)’ of that property as on 1st April, 2001, instead of cost of acquisition. (You can get the FMV details of a property from a Govt approved Property Valuer.)
2 - I believe, yes, two new properties can be bought with the proceeds.
Related articles :
https://www.relakhs.com/gift-income-tax-rules-detailed-guide/
https://www.relakhs.com/sale-gifted-property-capital-gains/
3 - The new house has to be bought one year before (under-construction property) the transfer of the first house or within two years after the sale. (For an Under construction property or flat , the construction has to be completed within three years of the transfer of the first property.)
Kindly read :
https://www.relakhs.com/how-to-save-capital-gains-tax-on-sale-of-land-house-property/
Suggest you to kindly consult a CA as well, n this regard
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