Ltcg on property
I have booked a flat in a multi-storied complex (being constructed by a builder), for 1 Cr. in joint name with my spouse (say, in names “A” & “B” with 50-50% holding each as per agreement). Installments are linked with the construction stages spread over 3 years and payment commenced from January 2023. By now, 6 installments have been paid in the past 18 months corresponding with 65% construction. Balance 35% payments are to be made in 4 installments in next 18 months till December 2025. All the payments are first to be made from own savings without selling existing flats/properties. Possession of the new flat is likely to be given by March/April 2026. It is planned to sell two existing flats (first one in Noida and second in Goa) and to save on tax on LTCG by setting-off LTCG against payment made towards the new flat; commensurate with 50-50% holding of each owner “A” & “B”. My queries are as below:
1. The flat in Noida was purchased for 27 lakhs in January’ 2006 in the sole name of “A”. It is intended to sell Noida flat for 1.4 Cr. by December’ 2024. However, reckoning from the likely date of possession of new flat in March/April’ 2026, what should be the timeline or period (prior to or after taking possession of new flat) as per IT Section 54(?) during which the existing flat in Noida should be compulsorily sold so as to become eligible for setting-off the LTCG against payments made towards new flat? Also please clarify whether the tax benefit would be commensurate with only 50% of the holding in the new property (say, 50 Lakh) in favor of the sole owner “A”?
2. The flat in Goa is jointly held in the names of “A” & “B”. The Goa flat was purchased for 35.70 Lakhs and was registered on 26/04/2023. However, its possession in likely to be given in December 2024. I intend to sell it for 55 Lakhs after 2 years reckoning from the date of registration i.e. after 27/04/2025 in order to become eligible for setting-off LTCG. My first query concerning Goa flat is about the timeline or period (prior to or after taking possession of new flat) when to sell it reckoning from the likely date of possession of new flat in March/April’ 2026. Also please clarify whether the owner “B” would be eligible to set-off LTCG of approximately 19.30 Lakhs against payments made towards new flat?