I inherited house property from my father in 1974. In 2006, I gifted it to my wife. This month, we will be selling it. Please advise regarding tax implications.
Who will be liable to pay capital gain tax? Me or my wife?
What are the exemptions available?
You inherited the property in 1974. But the fmv as on 1981-82 would be taken as base.
indexed cost will be calculated as follows
cost of acquisition to the previos owner( that is You)*Cost inflation index of year of trf / CII of the year in which your wife became owner (2006).
the tax will be paid by your wife and the exemption u/s 54 can be availed.
As per section 54, exemption is avaied to the extent of such capital gain as invested in the purchase of another residential house within one year before or 2 yrs after the date of transfer, and in case of construction, 3 yrs from the date of sale.
Agreed with the above views. You should have the gift document registered so that the property is legally registered in her name. Else you will have to pay the capital gains.
Thank you for the replies.
It is my understanding that section 27 (i) is applicable only with respect to income under the head house property. However, please clarify whether this section will result in the house property being charged to capital gain tax in my hands as deemed owner, instead of my wife.
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