Capital gains tax on property received as gift

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Anoop Chitkara (Querist)
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01 May 2017 A bought a flat a decade ago. Less than three years ago, he gifted it to his two sons in equal shares through a registered gift deed. Stamp duty was paid on the prevailing market value. Now sons want to sell it. What would be the value to compute capital gains tax? The price at which the father had purchased or the market price at the time of gift deed as reflected in the registered gift instrument?

CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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01 May 2017 Gift received by son from Father is not considered as transfer and hence exempt from capital gain tax, but in future when son sells such gifted property then price at which it was purchased by original buyer i.e father is to be taken as purchase value or cost of acquisition.

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Anoop Chitkara

Anoop Chitkara (Querist)
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01 May 2017 It is perfect response. Thank you so much Mr. Jain.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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02 May 2017 Period of holding shall be reckoned from the date father purchased flat for the purpose of determining whether gains are short term or long term. but indexation will be applied only from the year in which property was received by way of gift.

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Anoop Chitkara

Anoop Chitkara (Querist)
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02 May 2017 Thank you Mr. Abhishek Goel.

Anoop Chitkara

Anoop Chitkara (Querist)
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02 May 2017 Amazing clarity. thanks once again

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