I am an NRI residing in U.A.E. I intend selling a piece of land in chennai that is in my wife’s name (WIFE is also an NRI) with an idea to reinvest the entire proceeds of the sale to purchase a new apartment in chennai. As per my understanding, if the sale proceeds are fully reinvested within one year, the same is exempt from capital gains tax.Is my understanding correct….there is also another problem that the land buyer who is a flat promoter is only taking power from my wife and is not registering the land in his name…kindly advise what precautions i need to take in this case and also whether it is advisable to register the new apartment in my wife’s name alone or jointly with me.
The sale proceeds from original property must be utilized to purchase another residential property within 3 years of sale of original property, or else, long-term capital gains tax applies.
If you are referring to the sale deed registration (the document which entails you as the owner of the property), the same is signed only when the house is ready and you have paid your final settlement. The deed is registered with the sub registrar of the area to include your name in the local municipal records.
Apart from this, stamp duty as mandated by the government would have to be paid. At the time of registration, costs of sinking fund, maintenance deposit etc., are to be paid to the builder.