Ltcg & gift deed.

This query is : Resolved

mizbah khan (Querist)
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03 June 2015 A father had purchased a plot of land in the year 1981 for Rs. 12000/-. Later in the year 1985,1990 & 2000 he spent Rs. 10 lacs, Rs. 5 lacs & Rs. 10 lacs repectively for construction of house property. The same house property was sold in the year 2014 for Rs. 1.40 cr. After applying indexation there's a capital loss of Rs. 4,18,566/-.
Now the father gifted the cash received from sale of property to his son ( without any gift deed ) to purchase a property in the name of the son.

My question here is that, Is there any need of registered gift deed for a movable property that is gifted (cash). The father is not liable for any LTCG as there is a LTCL but is the son liable for any tax for that matter?

Please put some light over the issue or if there are any other details.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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03 June 2015 At the time of gift there is no implication in the hands of the son as gift received from relative is exempt. In father son relationship there is no clubbing of income also even if some income is earned on property purchased out of gift money by son. Regarding gift deed though it is not necessary in the case of movable articles it will be better from income tax evidence point of view to prepare a gift deed.

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mizbah khan

mizbah khan (Querist)
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11 June 2015 Now in the above scenario suppose if the is LTCG instead. Can the father utilise the benefits of exemption u/s 54??.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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11 June 2015 Father can utilize section 54 benefit only if he himself makes investment in new house and the house is in his name only. If he has gifted sale proceeds to his son and his son purchases new property in his name than father can not utilize section 54.

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