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Capital gain on swapping house property between brothers

Tax queries 493 views 2 replies

S.Vix

ARTICLED CLERK

60 Points Joined May 2013

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)

Guest

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.

CS Advocate Abhishek Goyal

M Com FCS LLB M-AIMA

14043 Points Joined June 2009

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.