Tax on immovable property received by me and my wife

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This query is : Resolved

Subhash Rohra (Querist)

13 March 2014 Dear sir,
My father in law wants to gift his big flat valued at 1.22 Crs as per ready reckoner to his son in law and married daughter . what will be the stamp duty which we have to pay and will we be liable to income tax on the same.
Also will there be any income tax or capital gains to be paid by my father in law.
In return we will be buying a small flat for them and keeping a certain amount in FD's for their survival.
We will be funding this by selling our flat jointly owned by my father age 90 yrs , my wife age 34 yrs, and myself age 45 yrs. We will be getting Rs.75 lacs for the flat purchased in Oct 2008 for Rs. 27 Lacs .

If we invest certain amount in my father's name in NHAI or REC Bond can his share be exempt from capital gain
My wife and I will be jointly buying a small flat which will be used by my in laws to stay so can web exempt from capital gains.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

19 March 2014 1. Transfer of assets by way of gift is EXEMPT from capital gain by virtue of Section 47.

So there will be NO capital gain tax in the hands of your father-in-law

2. Gifts received from relatives is NOT taxable by virtue of Section 56(2)(vii).

So there will be NO tax in your hands on receipt of the property.

3. You will have to pay stamp duty at the prevalent rate.

4. On sale of flat owned by you, capital gain will arise.
If you invest the amount in NHAI or REC bonds within 6 months of the date of transfer, then the capital gain will be exempt to the extent of the amount invested.

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