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Capital Gains exemption on transfer of gifted property.

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tarun Hassija

student

28 Points Posted on 05 November 2020

Can Capital Gains exemption be taken on transfer of a gifted property which was received as gift after the purchase of property which is to be claimed as exemption?

Mr. X received a property as gift from his parent in the current financial year (for e.g. 15th Oct 2020) Now Mr. X transfers this property resulting in Capital Gains.

Mr. X made payment for purchase of new property (assuming entire amount of capital gains invested) in the period of 1 year before the date of transfer (for e.g. on 1st Nov 2019). However purchase agreement for the same was made earlier than the 1 year before the date of transfer (for e.g 1st May 2019) Can Capital Gains exemption be taken in such case?

Further, Mr. X also owns another property. Will there be any implication in claiming Capital Gains exemption?

Replies (2)

Quick Summary

This discussion explores whether Capital Gains tax exemption can be claimed when selling a property received as a gift. It examines scenarios where the new property was purchased before receiving the gift, and whether the holding period of the original owner impacts the 'long-term capital asset' status. The implications of owning additional properties are also considered.

Prajakta

Student CA IPC / IPCC

62 Points Posted on 05 November 2020

Is the property a long term capital asset?

tarun Hassija

student

28 Points Posted on 05 November 2020

Considering the Period of Holding of the previous owner (parent) (who actually acquired it other than by way of gift, inheritance etc.), it is a long term capital asset.