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Capital gain tax

MANOJ KUMAR JHA (MANAGER (ACCOUNTS)) (69 Points)

25 July 2015

Respected all,

Please advice me

Can one AOP (Trust) gift his own immovable property(Land) to educational institution ? Educational institution run by another AOP (Trust) affilated to NCTE (National Council for Teacher Education),

Is their any incidence of capital gain tax arising out of this transaction ? if yes, than how to avoid these capital gain tax.

Thanks & Regards

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2 Replies

Rajagopalakrishnan R (PARTNER) (1417 Points)
Replied 25 July 2015

Capital gains will not arise in a gift transaction.

However, any gift of Immovable property between unrelated persons attracts tax as it will be deemed to be income under section 56. . But if the seller trust is registered u/s Sec 12 and enjoys exemption under section 11 of the IT act, ( Charitable Institution) then the deemed income may not be taxed in the hands of the receiver trust. But the implications on the donor trust for tax exemption on account of this gift will have to be examined.

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CA Chandra Prakash (9873059766 Increasing knowledge through sharing) (296 Points)
Replied 26 July 2015

According to me in the above case sec 56 shall not apply. It is because sec 56(2)vii shall apply in case of gift received by individual and huf and others sec. Of 56 deals in transfer of shares in case of closely held co. And firm. Therefore transfer of immovable property is exempt from CG by virtue of sec. 47. It provides that the following transaction shall not be regarded as transfer for the purpose of sec.45 and no CG shall arise: "Any.transfer of a capital asset under a gift". Any other opinion may be and pardon me if I m wrong