Tax on capital gain which is gifted

Hello, my Aunt wants to sell a flat of Rs. 28 lacs. If we transfer the proceeds to her 2 daughters through gift deed (14+14) than can we get relief from Income tax? do my aunt need to pay capital gain on 28 lacs which she wants to give her daughters.?? do the daughters needs to pay any tax?? what formalities and compliance needs to be followed?? please help.

 

Replies (4)
  1. If transfer of property is made to the daughters then no capital gain is taxable. But if such property is either directly sold by your aunt or by daughers (after transfer by gift from aunt) to someone else, then difference between sale consideration and cost of property is taxable in the hands of aunt or daughters as applicable.
  2. If you need exemption from capital gain, then you need to make certain investments like buying house property, bonds subject to certain conditions imposed.

First of all, your aunt has to comply the tax liability that may arise from the gains arrived at sells of the flat. After that she may gift her capital to her daughters, if she wishes. 

Rightly stated above by Mr. Dhirajlal, the flat sold by your aunt will be taxable under head capital gain, 

In order to transfer the proceed to your daughter, it would be advisable that if you invest the same in purchase of new house property the same could be claimed exemption u/s 54, and this wayyou would be exempted from tax.

When you gift an immovable asset like a house, you will need to get the gift deed registered with the authority concerned.

A gift deed is a legal document used to voluntarily transfer a property as a gift from the donor to a donee without the exchange of money. The gift can be transferred to a person or an institution which should be accepted by the donee within the lifetime of the donor.

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