Capital gain

Tax queries 426 views 2 replies

Arpit Pachisia

734 Points Posted on 13 March 2014

Hello friends,

My father had purchased a property as on 10/5/1986 for Rs.1,00,000. On 10th feb 2014, he gifted such property to me. Now I want to sell the said property for Rs.30,00,000 as on today i.e. 13/03/2014. Is this LTCG/ STCG? Please compute my LTCG/STCG.

Will it make any difference if my father doesn't gift such property in favour of me and sell that property for Rs.30,00,000 and than gift such amount receivable to me.

Replies (2)

Umesh Rijal

Internal Auditor

909 Points Posted on 13 March 2014

Dear Mr. Arpit,

In your hand LTCG will be attracted and computation of such LTCG is as follow:-

Sale consideration			3,000,000.00
Less: Cost incurred during the sale			0
	Net Sale consideration		3,000,000.00
Less: Indexed cost of Acquistion			670,714.29
Less: Indexed cost of improvement			0
		LTCG	2,329,285.71

If your father sells the property and gifts you the amount then there will bw no tax in your hand as father falls under the definition of relative under Income Tax Act, 1961. However, your father has to pay tax on LTCG but the benefit is, your father may be senior citizen and there is some benefits for senior citizen in ITA, 1961.

Mihir

Wealth Manager

5293 Points Posted on 14 March 2014

Your father cannot gift the sale proceed to you as he is liable to LTCG. He will have to avail exemption u/s 54 and invest the sale proceed in another property or bonds, and accordingly file ITR.