My mother has sold a 20 year old property in her native town in X lakhs last year , money received is kept in Capital Gains Account . Now she wants to gift me that money to buy a new flat. I want to include that X amount while purchasing a new flat for Y amount where Y is significantly larger than X amount. How can I do that without any tax implications to her and to me . What is the best possible solution for this ?
Best solution would be that she becomes the co owner in the flat and directly invest in new flat to claim exemption and later on gift you the above property.
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Thank you
Hello,
Rather than gifting the money, it would be better if your mother directly invests the amount in the purchase of the new flat. Firstly because use of the amount in Capital Gains Account can be only made for specified investment or else it would become taxable. And exemption u/s. 54/54F would be available even if the investment in the new residential property is made in the name of the son.
I hope that this answer satisfies your requirements. For further understanding, you can contact us directly at or take a phone consultation.
Regards,
CA Hunny Badlani
Hi,
If your mother gift this money to you ,you will not be subject to tax as the gift from the relative is not covered in the taxable income in the hands of the recipients.
It is advisable to received the entire money through gift deed.
Also, you can buy the new property jointly with her so she will be eligible to get the capital gain exemption for her respective share.
It is advisable to take a phone consultation for detailed discussion.
My View:
If your mother has sold a property and gift cash to you then the capital gain will be charged in your mother's hand.
Second, you have to get gift deed executed by your mother then it is exempt in your hand and you can use this money anywhere.
To save tax you can contact me.
The best way is to include your mother as a co-owner in the new property in proportion to her investment. This will make your mother eligible for capital gain exemption.
Your mother should first calculate the capital gains on sale of this property and report the transaction in her return. IN case, there is a tax liability, she should buy the property on her own to avoid tax liability. She can thereafter transfer the new property to you. In your hands the gift is not taxable.
