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Capital gain on swapping house property between brothers

Tax queries 559 views 2 replies

MR.X AND MR.Y ARE BROTHERS HAS HOUSE PROPERTY AT ANNA NAGAR AND VELACHERY RESPECTIVELY BOTH WANTS TO SWAP THEIR HOUSE PROPERTIES WITHOUT ANY MONEY CONSIDERATION. WILL THIS ATTRACT CAPITAL GAIN. PLEASE ADVICE 

Replies (2)

In my opinion, as they are relatives, they can gift the houses to each other without any tax implication.

In case they do not wish to excecute the gift deed, the exchange transaction will be considered as a transfer. The considerations will be the fair market values of the houses. In my opinion they can take benefit of section 54 to reduce the capital gains tax.

If the transactions is entered into as gift than there will be no tax implications. But gift deed will have to be executed as it is must in case of immovable property. Otherwise transaction will be mutual exchange liable to be taxed as transfer u/s 47.


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