TAX PROCEDURE
R_PVK
(Querist) 26 April 2010
This query is : Resolved
Dear sir
M y mother had been issued the letter of aministration for the property worth of one crore
the querry is
1, any asset if sold within three years are bound to have in come tax or mere title change is supposed to be Gift. if mu mother is thinking of distributing it to their childrens say 4 + to the two daughters of his brother what will be the procedure
2, if she pays tax like high capital tax gain or low capital tax gain and distributes to the children and brothers daughter whether the receiver has to pay further tax or will it be treated as gift
3, what is the maximum limit above which the gift tax has to be paid
regards
R_PVK
AMIT BAJAJ ADVOCATE
(Expert) 26 April 2010
Any capital gain arising from the sale of a capital asset except securities or shares sold within 3 years from the date of its purchase will be taxable as Short term capital gain.
If your mother wishes to gift the property to her children or any lineal decendent it will not be taxable as capital gain and the gift in the hands of the donee will be exempt since the children and lineal decendents are covered in the definition of relative u/s 56.
There is no limit on the amount of gift which can be given to the relatives, it will be exempt so long its given to the relatives. Limit for accepting gift from non relative is Rs 50000 above which it will be added to the income of the donee.
Gift tax is no more applicable in India.
soumitra basu
(Expert) 05 May 2010
The answer to question no. 2 is NO
