Capital gain calculation - Stamp duty on gift deed

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A property owner gifted their share to their son, paying stamp duty on the gift deed. Now, the son wishes to sell the property and wants to know if the stamp duty paid on the gift deed can be included as a cost when calculating capital gains tax. There are differing opinions on whether this expense is allowable as it relates to the transfer of ownership rather than property development.

Suraj

Suraj (Querist)
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07 January 2024 Dear Sir/Madam,

My query is as follows:

Mr A & Mr B, Father & Son, purchased a property jointly in Panvel, Maharashtra in 2007 for Rs. 10 Lakhs. Due to old age, Mr A gifted his 50% share in property to Mr B in 2016. Mr B paid Rs. 30000/- as stamp duty & registration charges of Gift deed.

Now, in Jan 2024, Mr B wants to sell this property.
Can he claim this Rs. 30000/- towards registration of gift deed as cost in capital gain calculation?

Kindly guide.
Thanks & Regards,
Suraj

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 January 2024 Yes, it can be included as cost in capital gains calculation.

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RAJA P M

RAJA P M (Expert)
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08 January 2024 Dear Sir, As per my view The said charges not into the development of the property. So, the GIFT DEED is not a expense for the property and can't include the calculation. (Please correct me if wrong)

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Suraj

Suraj (Querist)
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08 January 2024 @Raja P M sir, but when we incur renovation expenses after a few years of the purchase of property, we consider those expenses in the capital gain calculation. Similarly, the gift deed is in furtherance to the smooth sale of the property, without causing any legal trouble and also for the convenience of the owners.
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