Capital gains

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This query is : Resolved

Arunkumar Yemula (Querist)

20 June 2012 A person(Mr.X) sold his house property/Land to another person (Mr.Y) all the legal formalities have been fulfilled except registration.During the life time of Mr.X the transfer was not registered.After the death of Mr.X ,Mr.Y insisted Mr.Z son of Mr.X to register the transfer.Mr.Z registered the transfer.Does Mr.Z is liable to pay tax on Capital Gains (Though the consideration for the transfer of house property/land received by Mr.X)?

CA Kalpesh Gokani

CA Kalpesh Gokani (Expert)

20 June 2012 Yes..Mr Z is liable to pay tax on capital gain as the transfer was not exicuted befor the death of Mr X..right on property is now with his legal hires i.e in this case with Mr. Z..also the amount received by Mr. X is also now property of Mr. Z..so Z is liable to pay tax on capital gain..now Mr. Z can take benefit of indaxation only if he has register the transfer after 36 months from the death of Mr. X..otherwise it will be short term capital gain only.
If Mr. Z can show any documents which proves that right in the property was transfered to Mr. Y befor the death of Mr. X and transfer of property was made befor death of Mr. X...he may fight and take benefit of indexation..but in this case he has to file return as a executor of Mr. X and not on his account

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