05 May 2009
promoter alloted me flat in june'2008, can i sell the flat to my doughter and then I will purchase her old flat, in this reards will there be capital gain tax?
05 May 2009
1. You and your daughter are two tax entties.
2. Profits or gains arises on transfer of capital asset under scetion 54.
2. Since condieration recieved is not in money but by way of exchange of flats, considertaion value will be determined based on fair market value (Refer section 55A).
05 May 2009
Yes there will be capital gain tax. To minimise the tax impact it will depend on whether you own any other residential property and/ or if you are willing to invest the sale proceeds in the capital gain account scheme as stipulated under the act.
05 May 2009
The capital gain tsx would be there. In case if you and your daughter own the only flats in question, both of you can calim the capital gain exempt from tax section 54 of the Act if the flats are owned for more than 36 months. For this the capital gain on the transaction to both of you would be required to be invested in flats owned by each others. Howerver both of you own more than on one flat, still the tax can be saves by investing the entire cpnsideration, other conditions being the same.
06 May 2009
See in your case this is short term capital gains. It is taxable as per the slab of income tax act.
If fair market value/value for the purpose of stamp of old flat is higher than the fair market value/value for the purpose of stamp duty of your new flat, then short term capital gains comes in to picture.
If there is capital gain then you can not claim any exemption u/s 54, as all the exemption is for long term capital assets.
CAclubindia
