Capital gain on property received by release deed

DEAR SIR,

ME AND MY FATHER  OWNS A HOUSE JOINTLY HAVING EQUAL SHARE..MY FATHER IS WILLING TO TRANSFER HIS 50% SHARE TO ME WITHOUT ANY CONSIDERTION  OF MONEY .BY" RELEASE DEED".

MY QUESTION IS THAT WHETHER ANY CAPITAL GAIN WILL ATTRACT TO ME ON 50% SHARE RECEIVED BY ME THROUGH

MY FATHER WITHOUT ANY CONSIDERATION.

KINDLY  REPLY

THANKS

ANURAG JAIN

Replies (6)

It is treated as gift, being from "relative' as per IT act, no capital gains tax liability...... or gift tax liability.

Any transfer of Capital Asset under will or gift won't be treated as "Transfer" for the purpose of calculating Capital Gain Tax as per Sec.47(iii) of the Income Tax Act.

Hence, No Capital Gain would arise to your father.

I have a follow-up question : if the son eventually sells the property within 2 years of the father's release, will his cap gain be treated as short term or long term ?

In case of gifted property, the cost for the purpose of income tax, shall be the taken as the cost that was paid for the property by any of the previous owners.

The profits shall be treated as short-term or long-term, depending on whether the aggregate of holding period of donee as well as that of the previous owner i.e. donor, is more than 24 months or not.

Thank you Sir, very insightful point on the holding period. Can you please confirm if the same hold true for released/relinquished property as is the case in the original discussion ?

It holds good doing inhertance, i.e. partition of any inherited property; but not after that.

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