Very interesting situation for transfer of house property

Tax planning 124 views 1 replies

There is a situation where there is a house property owed jointly by husband and wife but in the name of a private limited company. In the said company the shareholdres of the company are 2 partnership firms (LLP) in which both the person have equal partnership. Means- 50% shares held by XYZ LLP and 50 % shares held by ABC LLP and in both the said LLP both individuals have equal partnership. In substance the house property is joinly owned by them. Now the situation is that the said House Property acquired around 10 years ago needs to be gifted to their son and in event of direct transfer a good amount of capital gain will arise. Please suggest an effective method from which the house can be gifed to the son without any tax implication. Capital gain is taxable in event of distribution of asset to thier partner in event of dissolution or retirement, hence by converting the company to partnership will also not work. Please suggest an effective manner.

Replies (1)
I think transfer of a capital asset by way of gift is not at all considered as transfer as per section 47(iii). Hence capital gain will not arise. It will be taxed under Income From Other Source in the hands of receiver.


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