Mother got capital gain son purchases property in his name

Yes she has to pay 20% TAX on the same.

The best thing is that if she purchase the property jointly with you 1st owner your mother and 2nd is you and then she can transfer the property through Regitered WILL or Registered Gift Deed (Low TAX ON Gift DEED).

What if new property cost is higher than the value of property sold by my mother? Say old property is sold by mother at 30 Lakh (including capital gain) and new property value is 56 lakh, where 36 lakh will be contributed by mother and 20 lakh will be contributed by me. Out of which I have to take Bank loan as well for 10 lakh. Can I be first owner OR it doesn't matter to be first owner?

My concerns are:

1. In future I want to have new property completely in my name only, as I've elder brother too and my mother has already gifted another property to my elder brother. This new property is final settlement for me. In future I don't want my elder brother to make any claim on this new property.

2. What difference first and second owner makes ?

3. Also any expertise opinion on Capital Gain of my mother if she gifts all money to me and I purchase new property in my name only ?

Thanks in advance!

Regards,

S S Singh

How did your mother get the property in the first place? Did she purchase with her own earnings? Or did she get the property by gift deed or through inheritance?

First the cost of acquisition of the property has to be indexed and the gain over the indexed cost is deemed as the taxable capital gain. If the new property is purchased in joint names without indicating the share of each person, the first named person in the document can claim exemption from capital gain. If the share of each person is indicated, then each of the joint holder can claim to the extent of his/her respective share. In the case of joint holding without indicating the share of each person, it can be claimed that the name/s of person/s other than the first named have been entered for such purposes as inheritance, managing the property etc.

If you and your mother jointly purchase a property indicating the contribution of each of you, your mother can claim exemption to the extent of her own share. For instance if her share in the new property is equal to or more than her indexed cost of acquisition of the property disposed of, then she can claim full exemption.

If your mother sells the property and gives you all the cash, she would be liable for full capital gain tax, as though she has not purchased any property.

How did your mother get the property in the first place? Did she purchase with her own earnings? Or did she get the property by gift deed or through inheritance?

First the cost of acquisition of the property has to be indexed and the gain over the indexed cost is deemed as the taxable capital gain. If the new property is purchased in joint names without indicating the share of each person, the first named person in the document can claim exemption from capital gain. If the share of each person is indicated, then each of the joint holder can claim to the extent of his/her respective share. In the case of joint holding without indicating the share of each person, it can be claimed that the name/s of person/s other than the first named have been entered for such purposes as inheritance, managing the property etc.

If you and your mother jointly purchase a property indicating the contribution of each of you, your mother can claim exemption to the extent of her own share. For instance if her share in the new property is equal to or more than her indexed cost of acquisition of the property disposed of, then she can claim full exemption.

If your mother sells the property and gives you all the cash, she would be liable for full capital gain tax, as though she has not purchased any property.