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Capital Gains Exemption on Residential Property Can be Availed u/s 54 for Even Joint Property
Can a residential property be purchased by 3 members of the family in equal ratio, if yes, will any liability arise for Income Tax & Wealth Tax purpose if they own residential property in their individual names and they sell off their residential property within a year of purchase? i.e. all Individuals own residential property in their own name and now they want to own, one combine big residential property in equal ratio and they would sell off their residential property within a year. desaiashit2000@……………….in
Yes they can ,They can avail the exemption u/s 54 if all of them have joint and fixed ownership of the property. Section 54 which gives exemption shall be applicable according to their expenditure in the new house property . Read the Section 54 carefully and take full benefit out of it
“54. (1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of a long-term capital asset , being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from house property (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then], instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,…………“
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