Capital gains tax on joint property


House property held in joint names of 'A' and 'B' with equal rights.  On sale of the property, whether the capital gains accrue equally to both  and each has to show his share of sale price and pay capital gains thereon in his income tax return or the capital gains accrues to the first named seller or either of the sellers can pay the tax on the whole sale consideration?

 
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Retired employee.

Make a search in google with key words: Capital gains tax on joint property.   You can find very detailed notes, articles and case study and you can download the relevant citations for your need.

 
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Retired Manager

This is a matter to be clarified by a Chartered Accountant. Better contact a good CA.
 
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B.Sc., M B A( Hr), B L

On sale of the property,  the capital gains accrue equally to both . each has to show his share of sale price and pay capital gains thereon in his income tax return

 

 
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The tax liability will be split between A and B in the ratio of the ownership of the flat. Ownership ratio will be determined by the sum contributed by each of you to purchase the flat. Long-term capital gains tax will be levied at 20%. If the property was purchased before 1 April 2001, its fair market value (FMV) as on 1 April 2001 will be taken as its purchase price for calculating capital gains. The FMV will be the cost price of the flat or the price that it will fetch, if sold in the open market, whichever is higher. It is advisable that you to take the help of a registered valuer to determine the FMV. It is this value that the assessing officer will rely on in case of any dispute. Also, if you are selling the property below circle rates, the circle rates may be adopted for calculating capital gain. Whatever capital gains you do not invest, according to Section 54E of the Income-Tax Act, will be liable to tax.
 

 
 
 
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Thanks for the detailed reply. 

 
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