Capital gain/loan from the relative.

14 March 2019


I have queries related to Capital gain/Loan from the relative.


The property is newly constructed apartment and built on the land which is in the name of my father-in-law. He would like to gift one flat to my wife.

I have few queries related to this -
1. What would be the tax on selling the apartment? Process, norms & tax slab, etc.
2. Fund received will be considered as capital gain or can be shown as fund received from the relative (Non taxable)?
3. If taxable, what would be the current tax bracket and implications?
4. Can we use this fund to close open loan like Car & Home loan, show as fund being utilized in closing the current loan liabilities.
5. I would like to understand the various tax saving options.

Looking forward to your valuable inputs, suggestions and insights.

Best regards,


Click to Talk 14 March 2019
1 Gift to relative not taxable exempt.
2 when you sell the property on the same registration value no tax payable you can use the money for any purpose.
3 Tax payable only on difference in sale value.

Abhishek (Querist)
15 March 2019
Hi Sir, this means no tax is applicable on gift, the registration of new flat is not in our name. If we sell directly then the tax is not applicable. Please confirm my understanding. We can talk over call next. Looking forward to your reply. Thanks

CA Mohit Bansal (Expert)
15 March 2019
1. Flat received from relative is exempt from income tax, however when you sell the flat, capital gain tax is to be paid on sale consideration less cost in the hand of your father in law.
2. Tax payable is @20%
3. You can use these funds as per your requirement after paying taxes
4. Tax saving options are also available u/s 54


Click to Talk 15 March 2019
Yes if you sell directly then the tax is not applicable. You can receive entire sale value as gift. But your father in law has to pay capital gains tax.

venkata krishna reddy (Expert)
20 March 2019
very nice explanation sir
CA Mohit Bansal

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