Hello Sir,I and my brother with two sisters (totally 4partners) bought a house property jointly in 1999,now we want to gift ours 50percent share to our daughters, sons or spouse.Totally 8 partners after Gift deed. If we sell the property after registration of Gift deed with in two months, can new partners get benefits of long term capital gains like 4 of us. Please suggest. The property is in the name of 4members as of now, after gift deed it will be in 8 members name. Thanking you
Yes they will enjoy the benefit of long term capital gain as they will receive it by gift, provided the children are not minor otherwise it will be clubbed in fathers income. However there is no benefit in gifting the property to spouse as their income will be clubbed in your income.
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Thank you.
Yes sir,
All eight of you would get benefits of Long term capital gains because the gift is between relatives as per the Income tax act.
As per law if the transfer is between relatives and further the donees (your daughters, sons and spouse) transfer the property, the Cost of acquisition (cost of the property to you in year 1999) and holding period (from year 1999) would be considered of previous owner (i.e. you, brother and 2 sisters)
I hope that this answer satisfies your requirement.
Thanks & Regards,
CA Hunny Badlani
- Yes new partners will be considered as the owner of the property in respect to their share and will get the benefit of the indexation as period of holding will be considered w.e.f 01.04.2001. You can keep the share in such a manner so as to reduce the effect of tax.
Hello Sir, Can we invest Long term capital gain amount to extension of our previous house(we have to take plan sanctions and permission from corporation separately from corporation) to tax benefits. Thanking you
Hi
The gift deed needs to be registered and stamp duty shall be paid. For transfer to spouse, income shall be clubbed.
Yes, Exemptions shall be available as it would be LTCG only.
No, for claiming capital gain exemption, investment needs to be done in a new residential house property.
Yes sir there are some judgement which support your contention but do remember that you should have to proof of such extension and also there should be extension of a floor or something like that not just a small construction or renovation.
Thank you
- It would be subject to litigation.
Hi
Holding period for new partners will be considered from 1999 itself so yes,long term capital gain benefit will be available to new partners also on sale of property.
Hope it helps
Hi
Extension of previous property will not be eligible for claiming capital gain tax benefits.
Investment in new property to be done.
Hope it helps
Hi,
Hope you are doing well !!
Yes, New partners can get the benefits of capital gain exemption.
Yes, you can but it is subject to litigation.
Hello Sir,
Well, the exemption in case of extension is a debatable issue in many cases of income tax.
We will have to what kind of extension you are planning to do. If it is a mere extension of the current house then the exemption might not be available but if you are building a whole new floor or flat a self-contained type might get you an exemption.
I hope that this answer satisfies your requirement.
Thanks & Regards,
CA Hunny Badlani
Hi,
Yes, the new partners will get the benefits of LTCG exemptions.
