Rajesh Dash (Professional) 11 March 2011
Respected Experts,
My mother purchased a property in the year of 1965 Rs.600 and now she wants to sale the property and gifts me the amount, as I’m only son to her, value of the said property is Rs. 5000000.00 which is decided.
Q-1- What would be the tax for me as well for her too, if she gift me the entire amount to me?
Q-2- If she invests Rs.4000000.00 to buying another property and balance amount invested in REC/NHAI bond then what would be the tax liabilities for her.
Please reply
A V Vishal (Advocate) 11 March 2011
You have not mentioned the value of the property as on 1.4.1981. Hence, assuming the same value viz.Rs.600, the indexed cost of acquisition of the property is Rs.4,266/-. The taxable capital gains is Rs.49,95,734. As per S.54 or 54EC of the income tax act this amount of capital gains has to be invested either in another residential house or deposited with REC/NHAI bonds. As far as the query is concerned viz.
Q-1- What would be the tax for me as well for her too, if she gift me the entire amount to me?
Ans. There is no tax liability for you on the gift received from your mother, however for your mother it will be 20.6% of Rs.49,95,734 which works out to Rs.10,29,120/-. Further your mother can gift you the net amount (after taxes paid) which comes to Rs.39,66,610/-.
Q-2- If she invests Rs.4000000.00 to buying another property and balance amount invested in REC/NHAI bond then what would be the tax liabilities for her.
Ans. NIL.
ABCDEFGHIJKLMN (ABCDEF) 12 March 2011
Firstly let me clarified that I am not an expert in this field, but I have tried to give you reply whatever little I know.
(1) If your mother sells the property, only she is to pay capital gain tax (not you)
your mother has purchased the property at Rs.600/-(six hundred only) in year 1965.
From approved/authentic valuer you get the value of the property it would be in year 1981 or 1982 say Rs,”A” (1981 or 1982 is the year in which cost inflation index was derived, and 100 was its base figure.) Then work out todays indexed cost, (Todays CII x “A” divided by 100). This is your indexed purchased cost. Subtract this amount from your selling price (Rs.50 lakhs) and pay 20% as capital gain tax on this subtracted value.
(2) From 50 lakhs you subtract amount “A” and pay 10% CGTax on this value. I think this will be lesser than (1) above.
If you buy a another property at Rs.40 lakhs and Invest Rs.10 lakhs in REC/ NHAI bonds no tax is required to be paid, but make sure that you invest within time limit.
Hello,
One of my friend sold his fathers property in the first week of January 2011 from which he got 60 lakhs. He invested some in purchasing a home. Its 6 months now and Still got more left.
Q] Does he have to pay tax? if yes then how much? or is there any other possibility?
Thank you
Guruprasad
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