If I sell one flat and use the full amount to repay loan running on another flat, is there any tax implications ? Pls advise. Thanks

Ans: Transfer of self occupied house property being capital asset is taxable under the head Income from capital gain. As property was held for 20 years, it will be long term capital gain taxable @20% plus applicable surcharge cess. Capital gain will be difference of Sale consideration reduced by indexed cost of acquistion.

You can calculate indexed cost at following link -
https://incometaxindia.gov.in/Pages/tools/indexed-cost-of-acquisition-or-improvement.aspx

Further, if gain amount is invested in buying another property and other conditions are fulfilled, exemption can be taken u/s 54.

Ans: Deductions are available for housing loan, if prescribed conditions are satisfied. Also sale of house property will be subject to long term capital gain tax.

Ans: You plan to invest the entire sale proceeds in constructing a new house on your wife’s plot. Under Section 54 of the Income Tax Act, you can claim an exemption on the capital gains if you reinvest the amount in a new residential property within a specified period. Since the new house is in your wife’s name, ensure that the reinvestment meets the criteria of Section 54 to claim the exemption.
If the full capital gain is reinvested, you can claim exemption and avoid paying tax on the LTCG. However, any unutilized portion of the gain will be taxed.

Important Points to Consider
Joint Ownership and Tax Exemption:
Since the flat is jointly owned, each of you must reinvest your respective share of the capital gain to claim the exemption. As the new property is in your wife's name, you might still be eligible for the exemption if the entire capital gain amount is utilized.

Consult a Certified Financial Planner:
Given the complexities and the involvement of joint ownership and different tax brackets, it's advisable to consult a Certified Financial Planner (CFP) to ensure that the transaction is structured correctly to minimize or eliminate tax liability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in