Capital Gains_Gift and sale thereafter
This query is : Resolved
13 February 2025
Dear Experts,
Property purchased in 2006 by assessee is now trfd as gift to his 2 sons. Will this gift result in capital gains if trfd to 2 sons without consideration?
Also when the son sells the property within 1 year , then the same will be treated as short term or long term?
What will be the cost for him for calculating capital gains? zero or cost to previous owner? If cost to previous owner , then cost of improvements done will also be considered?
Property purchased in 2006 by assessee is now trfd as gift to his 2 sons. Will this gift result in capital gains if trfd to 2 sons without consideration?
Also when the son sells the property within 1 year , then the same will be treated as short term or long term?
What will be the cost for him for calculating capital gains? zero or cost to previous owner? If cost to previous owner , then cost of improvements done will also be considered?
13 February 2025
1. no tax on gift here.
2. the transaction would still be considered LTCG
3. cost of the previous owner including improvements, if any.
2. the transaction would still be considered LTCG
3. cost of the previous owner including improvements, if any.
13 February 2025
Thanks for your advice!
Can we also claim indexation from the date of acquisition/improvement by previous owner?
Can we also claim indexation from the date of acquisition/improvement by previous owner?
13 February 2025
everything available as normally it would apply if no gift was ever given.
18 February 2025
Can we consider below exp as part of cost of acq:
1 - Stamp duty paid on gift
2 - Stamp duty paid on lease agreements when property given on rent and legal expenses paid for the same?
Regards,
1 - Stamp duty paid on gift
2 - Stamp duty paid on lease agreements when property given on rent and legal expenses paid for the same?
Regards,
18 February 2025
no. neither of the two are included in costs.
18 February 2025
refer to R.M. Arunachalam v. CIT [1997] 141 CTR (SC) 348 for similar issue resolved by Supreme Court.
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