Avoid buying a house in wife's, children's name to save capital gains

The taxpayer may not get the tax benefit if he is not the title holder in the new property

Recently, the Income-Tax Appellate Tribunal’s (ITAT) Mumbai bench denied a taxpayer the benefit of long-term capital gains (LTCG) tax, which allows an individual to save tax on the gains he makes after selling a house. He can do so by investing the proceeds in a new residential property. The reason for denial: The taxpayer didn’t buy the new property in his name - instead he purchased it in the name of his wife and daughter.

The order is contrary to the view that some other ITATs and high courts have taken in the past. Delhi High Court, for example, allowed