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Can I avoid capital gains tax by buying two flats in my name after selling my mother's flat?

Mihir Tanna |1018 Answers |Ask -Follow

Tax Expert - Answered on Jan 13, 2025

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more

Question by Saksham on Jan 10, 2025Hindi

Money

Hello Mihir I just wanted to ask that, we sold our flat which was in my moms name and now we want to buy two flats in my name so are we liable to pay capital gain tax or not. Is it ok if they buy it in my name and not in my mothers name, please tell me.

Ans: To claim capital gain tax exemption, owner is required to invest gain amount in new property. So if your mother buy property in your name, she will be liable to pay capital gain tax.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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I had sold 3 BHK flat in Sept,2015 and invested the sale proceeds in purchasing a flat in March,2016. this year in March,2023 I sold an ancestral flat purchased by my father in August,2007 and acquired by me through family arrangement and purchased a plot out of entire sale proceeds with intention to construct a house thereon. Pl let me know " will I have to pay tax on capital gain amount".

Ans: Hi Alok
Buying a plot is not considered as reinvestment and eligibility is on buying or constructing a residential house.

In this case if you construct a house on the plot then you could map the capital gains from the sale of the ancestral house against the cost of construction of the house on the plot.

Also, as you have sold the house in March 2023, you would need to open a Capital Gain Accounts Scheme (CGAS) account with any nationalized bank on or before the due date for filing your tax return. The deposit of the capital gain amount in the CGAS account would be treated as reinvestment for the moment.

You need to note that this CGAS account amount has to be utilized for construction within 3 years from the date of sale of the ancestral house.

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Question by Uday - Sep 25, 2024Hindi

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Hi Hi am 68 years old retired government employee in 2002 I had purchase a flat at 3.5 lack. Recently on May 2024 I have sell that flt on 21.50 .all the money I have given to my son who had purchased a new flat.can I pay capital gain tax.if yes then how much.

Ans: 01. Since you have sold the flat in May-2024, applicable LTCG tax would be @20%, with indexation.
02. You are liable to declare LTCG in your ITR & pay tax accordingly.
03. Exact tax amount payable by you can't be calculated in absence of detailed info about your Income from all sources & Tax Savings etc.
04. you can gift your son this sale amount, who may utilize the same in a way he likes.
05. If your want to save your LTCG, you should have purchased the new flat, may be in the name of your son. In this way you would have been entitled to exemption u/s 54. There are some tribunal decisions, which have confirmed that property purchased in the name of Spouse, son or daughter (Lineal blood relations), is eligible for exemption u/s 54.
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I bought a flat in 1999 for Rs. 14 lacs and I stay in it with my family. This is the only property I own. If I sell my flat and with sale amount(entire amount) I buy a new flat to stay, do I still have to pay capital gain tax or any other tax

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