Transfer of property

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Lokesh Agarwal (Querist)
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15 March 2009 Facts: A & B, joint owners of property. Now A wishes to transfer B his share in property without any consideration.

What are the options available and the tax implications? and if suppose A wishes to transfer property to B after his death as the legal owner by a mention in his will?

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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15 March 2009 in both the case of transfer the transfer shall not be taxable u/s 49(1)

but it shall be taxable at the time of selling it it shall be taxable.

I liketo quote 49(1) from my notes as follows

Deemed or Notional Cost of Acquisition [Sec. 49(1)]
In the following cases, cost of acquisition of the previous owner1 of the property shall be deemed to be the cost of acquisition for the assessee:
(a) Assets received on total or partial partition of HUF [Sec. 49(1)(i)].
(b) Assets received under a gift or will [Sec. 49(1)(ii)].
(c) Assets received by succession, inheritance or devolution [Sec. 49(1)(iii)(a)].
(d) Assets received on dissolution of a firm, BOI or AOP where such dissolution took place before 1.4.1987 [Sec. 49(1)(iii)(b)].
(e) Assets received on liquidation of a company [Sec. 49(1)(iii)(c)].
(f) Assets received under a trust (whether revocable or irrevocable) [Sec. 49(1)(iii)(d)].
(g) Assets –
• received by a 100% Indian subsidiary company from its holding company;
• received by an Indian holding company from its 100% subsidiary company;
• received by an amalgamated Indian company from the amalgamating company;
• being shares in an Indian company, transferred by an amalgamating foreign company to an amalgamated foreign company, if at least 25% of the shareholders of the amalgamating foreign company continue to remain shareholders of the amalgamated foreign company and such transfer does not attract capital gain tax in the country in which the amalgamating company is incorporated [Sec. 49(1)(iii)(e)].
(h) Asset (being a self-acquired property of a member) received by an HUF from its member [Sec. 49(1)(iv)].
(i) Asset received by way of transfer of a capital asset by a banking company to a banking institution under a scheme of amalgamation sanctioned and brought into force by the Central Govern¬ment u/s 45(7) of the Banking Regula¬tion Act, 1949. [Sec.49(1)(iii)(e)]

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