In the above case, in what proportion will the tax benefits be shared?
To the extent of the amount of loan taken in their respective names. What are the tax implications if a person buys a house with a loan and sells it (a) within the same year, (b) after three years? Further, what is the impact on benefits related to interest and capital repayment? If a person buys a house and sells it within the same year/after 3 years, and if any profit is made, then a capital gains tax liability arises on the same. Let us take an example to understand the same. For example, if the individual purchases a house for Rs 500,000 by taking a loan and sells it in the same year for Rs 700,000, then he has made a profit of Rs 200,000. On this profit, he will be liable to pay short-term capital gains tax since the sale took place in the same year. But, if the sale had taken place after 3 years, then a long-term capital gains tax liability would have arisen. The long-term capital gains will be exempt from tax if the profit amount (after factoring in the indexation benefits) is i
