Query regarding gifting of residential flat for claiming exemption

Tax queries 269 views 3 replies

prernajain0708

Student

24 Points Posted on 29 January 2016

Facts of the Case:

An assessee has 2 residential flats as on 31st March 2014. In F.Y 2014-15; he sold shares from his investment on 13th June 2014 and had LTCG on the same and had purchased another flat also during the same time from another Party. It was decided that 1 residential flat will be gifted to spouse before selling the shares so that the assessee can claim exemption u/s 54F. Gift deed was made and stamp duty was paid on the same on 7th June 2014(i.e. before selling of shares) but the gift deed was registered on 11th nov 2014.

Query:1. Is gift deed required to be registered for claiming exemption u/s 54F?

2.Does the payment of stamp duty before the sale of shares can be only considered valid for claiming exemption u/s 54F?

Replies (3)

CA Mehul Chudasama

Chartered Accountant

618 Points Posted on 29 January 2016

For Claiming Exemption U/s 54 You Have To Purchase The House Property

In The Question You Have Written That You Are Gifting The House Property To Spouse. So In This Case Where You Are Purchasing The House Property.

In Case if you are purchasing the house property there is outflow of Money. in your case you are not paying any thing to purchase the house property

CA Mehul Chudasama

Chartered Accountant

618 Points Posted on 01 February 2016

If The Valid Gift Deed Made The Before Sale Of Share Then On The Date Of Sale Share You Have Just Only One Residential House Property Which Satisfied The Condition To Claim The Exemption U/s 54F. Date Of Registration of Agreement Is Not Important To Which You Are Making The Gift To Spouse.

So Just Claim Proportionate Exemption Depends Upon Sale Consideration And Total Amount Of Invested In Purchase Of House Property

Second Thing I Think You Have Written That You Are Selling Share And Derived LTCG If Your Share Are From Indian Company and Transaction are done through recognized stock Exchange then LTCG is already exempt U/s 10(38)