Sold US MNC ESOPS/ESPP: Claim Long Term Capital Gain Tax Benefit with 2022 Home Purchase?

Ans: The provisions of Section 54 of Income Tax Act, which allows you to buy a residential property earlier and then sell some other residential property and adjust the LTCG (Long Term Capital Gains) of the latter into the former, is available only if the gap between the two transactions is One year or less.

In your case, you have written that you ‘bought’ the house in Dec 2021, and then ‘Conveyance Deed’ was done in May 2022. This is confusing since the applicability of Section 54 of Income Tax Act is specifically with ‘possession’ of the house.

If you got possession of the house in Dec 21, then the gap between possession of new house and sale of old house is more than One year and hence you cannot adjust the LTCG of the two properties.

If you got the possession of the new house in May 2022, then the Section 54 of Income Tax Act is applicable to you. Since the new house has been jointly bought and both of you have paid for it, then the LTCG of the sold house will be adjusted to the extent of your share in the newly bought house. If it gets fully adjusted, well-and-good. If not, then you will have to exercise other options (buy a property, buy 54EC bonds or pay the tax) as per Section 54.

Ans: yes, you can set off your long-term capital losses from the sale of property against your long-term capital gains from the sale of equity investments (stocks)

Ans: 01. You can offset your LTCG tax liability by investing the proceeds in Residential house property.
Exemption u/s 54-F is available only, if you construct a residential house, with in specified time (3 Years). Alternatively, you can also purchase a constructed house, 1 year before or 2 year after earning LTCG.
Most welcome for any further clarification. Thanks.

Ans: Yes, short term loss can be set off against long term capital gain