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Ajay (CEO)     20 April 2014

Selling a flat which was obtained by gift deed

My sister and Brother-in-Law brought the flat in Mumbai on 17th Oct, 2009 in 15 lacs.

They gifted the property to my Mother on 5th April, 2013. My mother paid the Stamp Duty and Registration Fee.

Now, my mother wants to sell her property.

I have few questions:

1. Is she eligible to sell the property?

2. If she sell the property now in 2014, will it be consider as LTCG or STCG?

e.g.
 If she sells the property in 35 lacs, how much will be the tax.

a. Since it is not the Sale Deed, will the purchase date be considered as 17th Oct, 2009 and she has to pay tax of LTCG (around 20%) on 20 lacs profit? it means 2 lacs.

b. If not a, will the purchase date be considered as 17th Oct, 2009 and she has to pay tax of STCG (around 30%) on 20 lacs profit? it means 6 lacs.

c. If not a and b, will the purchase date be considered as 17th Oct, 2009 and she has to pay tax of LTCG (around 20%) on entire 35 lacs profit? it means 7 lacs.

d. If not a,b and c, will the purchase date be considered as 5th April, 2013 and she has to pay tax of STCG (around 30%) on entire 35 lacs profit? it means 10.5 lacs.


Please let me know the rule and section in the law, which reflect this case of property transaction

 

Best Regards,

Ajay

 



Learning

 3 Replies

bhagwat patil (Property due diligence 9422773303)     21 April 2014

1)YES...2)LTCG...3)d.

Bharatkumar (ADVOCATE )     21 April 2014

(1) she sell this property. And for tax purpose u contact your C.A., he give a batter advise for that. 

Ajay (CEO)     21 April 2014

Hello Mr. Patil

I really appreciate your quick reply, but I am still having some doubts about this transaction

However, I think option 2 as LTCG and answer for question 3 cannot be correct at the same time.

In question 3, option D says it is STCG


Please suggest what will be consider as date of purchase and what will be profit?

Case is again mentioned below:

My sister and Brother-in-Law brought the flat in Mumbai on 17th Oct, 2009 in 15 lacs.

They gifted the property to my Mother on 5th April, 2013. My mother paid the Stamp Duty and Registration Fee.

Now, my mother wants to sell her property in 35 lacs?

Questions:

A. What will be consider as date of purchase?

    a. Is it date of purchase by my sister (17th Oct, 2009)

    b. Is it date of purchase/obtain via gift deed by my mother (5th April, 2013)

 

B. What will be profit while calculating Capital Gain?

    a. Is it selling price (35 lacs) - purchase price by my sister (15 lacs) = 20 lacs

    b. Is it selling price (35 lacs) - purchase price by my mother (0 lacs) = 35 lacs

 

C. Capital Gain is Long Term Capital Gain (LTCG) when property holding period is more than 3 years

     a. Am I right? or is it different from 3 years. If it is not 3 years, then what is the period

     b. Will my mom transaction be consider as LTCG (more than 3 years)

     c. Will my mom transaction of selling be consider as STCG (less than 3 years)

 


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