No tax benefit on house sale if new flat is in wife’s name


A taxpayer was recently denied I-T benefits available when LTCG from house sale are invested in a new property

The I-T Act’s Section 54 gives two years from the sale date to invest long-term capital gains from the old house in a new house to get tax relief

Tax authorities held that to avail benefits, the taxpayer must own or have the legal title of the new property

The Income-Tax Appellate Tribunal (ITAT)’s Mumbai bench recently denied a taxpayer I-T benefits available when long-term capital gains arising from sale of a residential property are invested in a new house.

The sole reason for the denial was that the taxpayer bought the new house in his wife and adult daughter’s names.

In a similar case, the Delhi HC had taken a view favourable to the taxpayer. ITAT’s Mumbai bench, though, was bound by the decision of the Bombay HC, which had taken a contrary view and held that the new property must be owned by the taxpayer or he or she must have legal title over it.

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