Capital Gains on Gift Deed Property

Querist : Anonymous (Querist) 06 May 2011 This query is : Resolved
X, Y bought a property worth 30 Lakh Rs/-on Dec 2006. But here the Sale Deed consideration is 6 Lakh (As per govt value, Semi finished registered) and Additional Development Construction Agreement had been done for Rest of the value (24 Lakh) which is not registered. So that total value equals to 30 Lakh and X, Y took loan on that for 26 Lakh and rest paid directly. X, Y made a Gift Deed of the property to Z (Z is husband to X and Father to Y) with Stamp Value for 12 Lakh on May 2009.Now Z is sole owner of the property. Now if Z wants to sell the property on today’s date –May 2011, following points need to be clarified. 1. What will be the value of consideration of the property (12 Lakh as per the Gift Deed value or 6 + 24 = 30 as per original Sale Deed value) to calculate capital gains as the gift proceedings were done among relatives? 2. Will that be a Long Term Capital Gains (As period from original sale crossed 36 months) or Short Term (As period from Gift Deed is below 36 months)? 3. Can we consider the Development Construction Agreement value (24 Lakh) for total Sale consideration while calculating Capital Gains?

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soumitra basu (Expert) 07 May 2011
Answer to your query :
1. 30 Lakhs provided you can prove it.
2. Long term Capital Gain.
3. Yes, In addition to this you shall have the benefit of indexation.

Querist : Anonymous (Querist) 09 May 2011
Thank you for prompt reply. But i came to know that 36 months have to be passed from date of gift deed to be eligible for LTCG otherwise it will be STCG. Is that true? Recently any ammendment to this rule? Please clarify me. Thank u.

R.Ramachandran (Expert) 09 May 2011
You are correct. For Long Term Capital Gains, the asset is to be held for at least 36 months. There has been no change in this position so far.

Querist : Anonymous (Querist) 10 May 2011
Here case is different. 36 months from date of gift deed? or date of sale deed? any section in income tax referring to?

R.Ramachandran (Expert) 10 May 2011
Dear Anonymous,
What is the difference between the two propositions that you pose?

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