zooropa 23 September 2016

Sr citizen property sale tax exemption

Hi, My mother is a senior citizen and is a widow. She has no other source of income hence she is forced to sell her property. she had bought the house for 9lakhs in 1992 and its worth 1Cr now. she doesnt want to buy another flat. she wants to gift 50lakhs to me (her daughter) and keep the rest in her bank. Is it possible to do so? As she has no other source of income. I would be highly obliged if someone would respond with a valid reply and suggestions to this query. thanks

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3 Replies

Anup kumar 23 September 2016

Property tax will be applicable on this .no matter your mother is whatever .it is compliance .

G.L.N. Prasad (Retired employee.) 24 September 2016

Seek professional help of a reliable Chartered Accountant and Advocate well before the transaction takes place, as their fees are nominal when compared with their valuable advice. Citizens must live peacefully without any harassment from authorities and seeking professional help ensures peace of mind, and they can guide you properly on such investment.

GANDHI MOHAN BHARATI (Pensioner) 26 September 2016

There are no provisions for Property Tax exemptions.

I gather that your mother wants to sell the property, gift Rs.50 Lakhs to her daughter and retain the rest with herself.

The sale will attract Capital gains Tax. As per Income Tax provisions the Capital Gain will be -

Value of sale minus (Value of the property in 1992 (divided by) the indexation of 1992 (multiplied) by the indexation of the year of sale).

The indexation table is availabe on Google serch or with an Auditor.

20% of the Capital Gains will be the Capital Gains Tax payable to Income Tax Department.

There are specified Baonds like that of NHAI or REC in which she can save upto 50 Lakhs. In the case her Capital Gains will get reduced by that amount. She will reduce her Tax burden.

These Bonds have a lock in period of 3 years and bear 6% interest payable annually. The interest received is subject to income tax; no TDS will be deducted.

As you have mentioned that your mother is a senior citizen and does not have any other income, the interest @ 6% on 50 lakhs works out to 3 lakhs in in her hand and she will not be liable for income tax. on that interest.

Whatever she wishes to gift to her daughter will not be taxable in her hands. However, the income out of the gifted amount will be subject to Income Tax in the hands of the daugther.

You may go through a tax consultant as it will save you the botheration of Income Taxp roblems..

Better receive the money in white through Bank to avoid any problems of Black Money. The guide line value at Registrar office may be low but you must reflect the actual receipt to Income Tax Department so that you are not troubled.