NA plot - Tax, Exemption & Benefits

[Asked by Guest]

I have below query regarding my plot outside Maharashtra:

I wanted to sell my NA plot transferred to my name in 1993, and estimated value of the sale proceed would be about ₹ 65 lakhs
Kindly advise me the following:-

1) If I purchase Capital Gain Bonds for 50 Lacs in this financial year i.e. 2015-16 and balance in next financial year 2016-17, will I get tax exemption for entire amount of investment in capital gain bond? Or will I have to invest whole amount in one financial year?

2) If I purchase a resident house jointly with my son with 50% contribution of mine and rest 50% of his, will i be eligible for a long term capital gain exemption benefit for my part of the money invested in the purchase? Or do I need to have sole investment in house with my ownership only?

[Ganeshan Kalyani]

The investment has to done before the filing of Income Tax return. The investment in the Bond has to be in your sole name.

I suppose you answered house purchase question for bond. Bond investment and purchase of it is going to be on my name.

if you could assist me with second question. Also, how soon the purchase of bond or investment into property has to be done after the sale of plot?

[Ganeshan Kalyani]

The capital gain on the transfer of property is taxable in the year in which it was sold. ie. if the property is sold in Feb 2016 then it is taxable in FY 2015-16. The return of the FY 2015-16 is be filed in AY 2016-17 in the month of June/July by salaried person. The amount of capital gain should be deposited in the Capital Gain Account Scheme before the date of filing of return i.e. June or July 2016.

AI Summary

Capital gain reinvestment timing: invest in bonds or deposit in CGAS before filing to claim exemption.
Long-term capital gain arising on sale is taxable in the year of sale; to claim exemption the taxpayer must reinvest gains or deposit proceeds in the Capital Gain Account Scheme before filing the return for that assessment year. Investment in Capital Gain Bonds must be in the seller's sole name. The adviser noted these timing and naming requirements but did not resolve whether a joint house purchase with the seller's son secures exemption for the seller's contribution.