Capital gains tax on gifted property

203 views 2 replies

R (aged 71) has a vacant plot measuring 2400 ft in West Chennai which was purchased in 1975.

N (79) his elder brother has a residential property of 2600 sft with built up area of about 1500 sft in East Chennai. It was purchased in 1974 and 50% of the property was settled in favour of his wife L in 2015. They want to demolish the house and construct apartment building there.

Now, if R executes a gift deed of his vacant plot to N and afterwards N sells it and reinvests the proceeds for construction of 4 flats in the premises jointly owned by N and L what will be the implications of Capital Gain Tax for N.

Whether N will get exemption of the construction cost of all the 4 flats or for one flat only?

Whether Settlement deed is preferable to Gift Deed?

What will be the obligations of R as donor under IT Act?

What are the other charges /expenses that may be involved?

 

Replies (2)
 
 

Now, if R executes a gift deed of his vacant plot to N and afterwards N sells it and reinvests the proceeds for construction of 4 flats in the premises jointly owned by N and L what will be the implications of Capital Gain Tax for N.

Whether N will get exemption of the construction cost of all the 4 flats or for one flat only?

As such only one........ but if all 4 are on same floor, can be treated as single unit.

Whether Settlement deed is preferable to Gift Deed?

Gift Deed preferable.


What will be the obligations of R as donor under IT Act?

None, except execution of gift deed.

What are the other charges /expenses that may be involved?

Stamp duty registration charges for each transactions; and any additional unabsorbed capital gains tax liability.

 

 

Thank you very much. I have one more query on the same matter and it will be put as a separate fresh query.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
25 June 2026
AUDIT MANAGER

JDAS & ASSOCIATES

New Delhi

CA

View Details
Company
20 June 2026
Assistant Accounts Manager

Fintax Professionals

Gurgaon

CA Inter

View Details
Company
05 July 2026
Financial Controller

NovumLake Partners

Mumbai

CA

View Details
Company
24 June 2026
Chartered Accountant - GST & Direct Tax

APL

Mumbai

CA

View Details
Company
20 June 2026
Chartered Accountant

ANV & Company

New Delhi

CA

View Details
Company
Featured 24 June 2026
HEAD - AUDIT AND TAXATION

A R JADHAV AND ASSOCIATES

Mumbai

CA Inter

View Details
Company
25 June 2026
Accounts & Taxation Executive

Dindukurthy & Associates

Hyderabad

MBA

View Details
Company
ARTICLESHIP 27 June 2026
CA Articled Trainee And Paid Assistant

SKAA & Associates

New Delhi

CA Inter

View Details