I have a flat in noida extension in my son’s name and my name.my son’s name is first and my name is second.we have sold the flat for 25.3 lacs.since the flat is not registered in GDA,THE FLAT has to be transferred in the name of buyer with the builder supertech and as per the sale agreement We have to pay for transfer fee of rs280000/- to the builders. Do I have to pay tax on 25.3 or 25.3-2.80= 22.5 lacs. Who has to pay tax .myself or my son or both 50-50.pl clarify.
Can my son save tax by investing the sale proceeds in another house.?all the amount or only 50%
Hi,
You will have to pay tax on 22.5 lacs minus the indexed cost of purchase of the house.
The tax will be paid by you and your son in the ratio of both of your's funding in the house.
Yes, he can save tax by investing only the capital gain(not the entire sale proceeds) amount in another hosue.
Hi,
1. You have to pay tax on Rs 22.5 lakh.
2.The tax liability will be split between you and your son in the ratio of the ownership of the flat.
3.Only 50% i.e. his share in the flat.
Yes, he can save tax by investing only the capital gain amount in another property.
If you have to pay transfer fee the capital gain will be calculated on 25.3 - 2.8 lakh and you will reduce cost of acquisition from same.
Your son can save the tax by investing the sale proceeds in another house but it will be restricted only to his share in the property i.e. 50%.
You can also save money by investing in bonds u/s 54EC.
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Thank you
1. On Rs 22.5 lakh. Also consider the Indexation cost of acquisition.
2.Tax liability will be divided share wise.
3. Only 50%.
You will have to pay tax on the capital gains i.e. 22.5 lacs minus the indexed cost of acquisition of the house.
The tax will be paid by both of you in the ratio of the amount invested by each of you in the house.
Yes, he can save tax by investing the capital gains in another house.
Hi
For calculation of taxes, capital gains shall have to be calculated. Capital gain shall be 25.3 minus indexed cost of acquisition minus transfer expenses. (2.8 lac shall be deductible)
Capital gains shall be taxable in the ratio of ownership.
For claiming exemption from capital gains, investment in New residential house property can be made. The amount of capital gains need to be invested to claim complete Exemption.
#I assume the flat sold was a long term capital asset.
Hi,
- If 50% share was financed by your son then your son is the owner of 50% share in property. If the property was entirely financed by you then you will be deemed as owner of the property for sons share.
- LTCG will be taxable in your hands and benefit of exemption will also be available to you only.
Thanks
Hi
Yes tax is payable by both on this transaction.
Since both are owner so both are liable to pay tax in ratio of amount contributed.
Yes reinvestment will help in saving tax .
Though money was paid by me,the flat was bought in my son’s name first and then second name was mine.now can he buy a property and adjust the sale proceeds in his new house he is buying or I have to pay tax for the whole amount?
Yes, he can buy a property and adjust the sale proceeds in his new house
You both will share the sale proceeds 50% as sale deed will mention both you as well as your son as the seller. However it is risky but you can try this: make a gift deed and transfer your share in house property to your son and then he can use the entire sale proceeds in buying his own flat.
However if you can't execute a gift deed just take the entire sale deed in your son's account and then use that money to purchase new flat.
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Thank you
Ideally if you have paid for the asset, your son cannot claim the capital gains exemption. How about buying the new property also in joint name and then you can gift your ownership to your son. This way you can save the capital gains taxes.
Hi,
Buy the new property in joint name and then gift your share of money to your son through proper gift deed.
However it is bit risky.
Hi
Since you are paying for the assets you are owner ,your son cannot claim the benefit of tax exemption.
Hi,
- As you would be treated as deemed owner of this property, exemption would be available to you only.
Thanks
Dear Sir,
In the given case tax shall be payable by you only since your name is namesake owner of proerty but you are real owner of the property. Tax shall be on the value of Rs. 22.5 Lacs. You can further invest this amount and save tax payable by you
Yes, he can do so. There are cases laws which support this proposition.
Ideally, since only you funded the property, entire capital gains shall be taxable in your hands.
You may receive the sale proceeds and invest in another residential house property to claim the exemption. The new property to be purchased could be in your joint ownership with son or may be in your son's name only provided you don't receive any future benefits from such property.