Dear Sir,
I request some pertinent clarifications pertaining to Gift Tax.
Suppose a person named "MR A" has a property (Flat) registered in his name.
MR A sells his property by a normal sale deed to a Buyer and gets entire proceeds in his saving account.
Let's say, the proceeds received for the purpose of this illustration is say 1.5 Crores. (i.e. it is > 50,000 INR).
He plans to use these proceeds in the following manner:-
1) Purchase of Flat (50 Lacs) intended to be transferred to his brother's name (MR B-Blood relative)
2) Purchase of Shop (50 Lacs) intended to be also transferred to his brother's name (MR B)
3) Balance cash transfer to "brother's demat account" (50 Lacs) (MR B)
That is -->
Person A is interested in transferring all the proceeds and assets, from this property sale to his Brother, let's say MR B (blood relative),
-Flat (50 L)
-Shop (50 L)
-Balance funds to brother's demat account. (50 L)
Our Questions are as follows :--
1. How should A go about this ?
2. At what stage should he execute the gift deed.? Immediately after selling Flat or Later.
3. How should he register Gift Deed ?
4) What should be the value of the registered Gift deed. Should it be for -> purchase cost of shop + flat + demat proceeds), or something else.
5) Are each of these assets to be mentioned separately in the Gift deed, or only the total value.
6) What will be the Tax obligation on A as he has received the process of 1.5 CR from sale of property (first transaction).
6) Will the cost of Flat (50 lacs) and shop (50 lacs) be excluded from the capital gain tax on A.
7) What will be the tax treatment on the amount (50 lacs) which is transferred in Demat account of B. Will there be a separate income tax in addition to the Capital gain tax paid by A. Will this Tax be to account of A or B (his brother).
Thanks indeed.
CAclubindia
