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Impact of gift deed on capital gains tax exemption

Tax queries 444 views 3 replies

Vivek Devarajan

Others

37 Points Posted on 04 May 2017

Hi,

My mother purchased an apartment 2 years ago, for claiming exemption on capital gains arising from sales of an earlier property.

Now she intends to gift the purchased apartment to me. As I hear, the holding period for the property is 3 years, for the capital gains exemption to be valid. So will this execution of gift deed impact the capital gains exemption that my mother claimed?

Thanks and Regards,

Vivek,

Replies (3)

rama krishnan

12244 Points Posted on 04 May 2017

as per section 47 of the income tax act, property transferred as gift will not be considered as transfer. so there won't be any problem for the capital gain exemption claimed by your mother

Vivek Devarajan

Others

37 Points Posted on 08 May 2017

Hi Ramkrishnan,

Thanks for that!!

I went through Section 47 as suggested by you, and that has clarified my question.

Now, after the transfer of the property to my name (via gift deed), if I decide to sell it at some point in future, then I would be liable to pay capital gains tax (unless I claim exemption by reinvesting the amount obtained), is my understanding correct?

Regards,

Vivek.

RAMA KRISHNAN

247 Points Posted on 08 May 2017

if you transfer within 3 years ie during holding period then your cost of acquisition will be reduced to the extent of capital gain deduction claimed by your mother. after 3 years, you will be liable to pay long term capital gain tax