Dear friends,
I have got a query. A woman assessee owns a property (3 pieces of land of 11 cents each). She has three children and now she wants to settle her properties to her children. her query is whether to sell the land by herself and give it equally or settle it by gift by settlement. Which is beneficial to her and to her children? If she sells the property whether any capital gain benefit will she get orelse the same can be sold by her children. In that case her children won't get LTCG benefit as they wish to buy a flat after they get the money. Which is beneficial in this situation?
Kindly clarify at the earliest
Regards,
Lalitha
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Capital gains
Replies (7)
I think the woman should gift it to her children as there will be no tax liability on her or the children......... Now, if her children sells the property and get a residential flat for themselves, they can ask for exemption u/s 54... So, lesser taxability
I think Dheeraj is absolutely right, the lady should gift i.e. one peice of land to each child, as a result if it would have been sold by the lady then whole capital gains would have been taxable in the hands of the lady. But if it is gifted to children, then the benefit of slabs can be taken.
Yes, it should be gifted and to be sold by her son. LTCG benefit is also available to her son, as the date for indexation is to be taken as original date of purchase by mother.
views of DHIRAJ & BIMALis correct
Go by the words of above friends....
First transfer by virtue of gift is an exempt transfer and it is beneficial to go by transfer to children first and go by words of the above my friends.
They all are true in their view
Dear Lalitha Mam...........
Sec 54 - Transfer of Res. house and pur / construction of Res. house.........
Sec 54F - Transfer of Long Term Capital Asset other than Res. House and pur / construction of Res. house.......
The lady can gift the property (i.e. Land) to her children....The children can sell the land and invest in Flat (i.e. Res. House) within prescribed time..........
The section applicable here is 54F and not 54 (if the property sold is Land and not Res. house)......
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