We are three brothers. We just sold our old house for Rs.55,00,000/-. The LTCG calculated thereon is about Rs.42,00,000/-. Now we want to construct a new house.
Our question is whether we have to invest net capital gain in equal proportion i.e. Rs.14 lacs each or can invest in odd ratio i.e.10 lacs,18 lacs & 14 lacs for the construction of new house to save the LTCG u/s 54 of the Income Tax Act?

Admin’s Response:

If the house is being constructed jointly and there is no mention of individual shares, the capital gain exemption can be availed. However, each brother otherwise is liable to invest his share of capital gain in order to avoid capital gain tax liability.