Income tax return (ITR) filing: All about tax liability on sale of house

If I sell a house in my name and invest the capital gain money in the same financial year in the following three types of property taken on loan by my son from bank - 1. The house/ flat in the name of my son 2. In the name of my son and wife 3. In the name of myself, my son and my wife. What will be tax liability for me in the above three conditions separately? The loan is taken by my son on his own name. S K Verma

As per the provisions of the Section 54 of the Act, if the assessee invests the income earned by way of Long Term Capital Gain on sale of a residential property in purchase of another residential house, he can claim it exempt. The only requirement as per law is that the assessee has to reinvest the gain amount within the stipulated time. There is no requirement that the assessee should be the legal owner of the new property. Many times the assessee ends up purchasing the new property in the name of their close relatives - children, spouse, etc.

Though, the tax officers have in the past also raised objection on eligibility to claim exemption for investment made in the name of close relative instead of the assessee himself. However, Income-tax Appellate Tribunals have held in favour of the assessee. Hence in your case also, you may take a position that the re-investment in the name of your son/wife should be eligible for exemption u/s 54 of the Act.

Watch this Zee Business video

I had opened my grandsons PPF account 10 years back. He has now become NRI and the bank is not closing the account. They need an Aadhaar to close it. My grandson does not have Aadhaar. What I can do to close his PPF A/C? Saroj Kakar
You will have to comply with the requirements of the PF authorities.

By: Chirag Nangia

Source: DNA Money