Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Transfer of immovable assets

Tax queries 443 views 1 replies

Manoj

Head- Finance

77 Points Posted on 31 October 2013

Dear Member

FACTS:

One of my client Mr. X has purchase a immovable property (non residential) for Rs. 6 Lacs in 1993. The assets was registered in his name but by a mistake payment was shown from a fully controlled Pvt. Ltd in which he is shareholders as well as director.

Further, from the year 1993 to 2013,the company has claimed depreciation under I. tax act and as as on 01.04.2013 WDV of the said assets is Rs. 1.75 Lacs.

Now, Mr X want to gift the said assets to his grand son.

QUERY:

What is the tax implication in the hand of Mr. X as well as in the hand of the said Pvt. Ltd. Company?

If there is any tax implication, what suggestion would you like to give to minimise the tax liabilities?

Thanks

M.K. Jha

Replies (1)

VIKASH KUMAR JAIN

Audit Executive

711 Points Posted on 31 October 2013

As asset is registered in the name of Mr. X, irrespective of the fact that payment is made by fully owned pvt. ltd. co. in which he is director as well.So if Mr. X gift the given Immovable asset to grand son, since grand son is covered under the definition of relative so grand son will be exempt from income tax.The Pvt. Ltd. co. will be liable to capital gain tax on transfer of immovable property.Pls. notify if I am wrong.For conputation of CG tax Fair market value should be considered as full value of consideration.