Can my mother sell her property and gift for my house construction and avoid tax

- Your mother can invest in the construction of house in your plot. Deduction would be available subject to litigation.

Dear Sir,

Hope you are doing well !!

A basic condition for claiming tax benefits, is that assessee/ (your mother) should be a owner of new property.

Unless you satisfy this basic condition, you cannot claim the tax benefits on the same.

However, joint ownership can be acceptable but exemption can be limited to the share of ownership.

It is advisable to take a phone consultation for detailed discussion.

Hello,

There are case laws in favour of the assessee where exemption has been allowed to the assessee for investment in residential property in the name of any other family member of the assessee.

Considering above, your mother would get the exemption for the investment of the sale proceeds in the construction of residential property in your name. 

I hope that this answer satisfies your requirements. For further understanding or capital gain calculation, you can contact us directly at or take a phone consultation.

Regards,

CA Hunny Badlani

You can either first gift your mothers plot to yourself and then claim exemption for construction or transfer your plot to your mother let her construct the house and then gift you.

There could be a litigation with regard to claiming cost of plot as exemption as same was purchased 3 years back.

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Thank you.

Yes you can do this as mentioned above and you need to construct new house within 3 years of sale.

Yes, you will get exemption provided the construction must be completed within 3 years of old property sales.

Hello Sir,

Yes, you can get the mothers plot as gift deed to your name and then sell it, you will get exemption if you use it for house construction on your plot purchased 3 years back

To get exemption,  the new residential property must be constructed within 3 years of the sale of the plot.

Yes, if your mother gifts the plot to you, then the capital gain would be taxable in your hands and exemption for house construction would be available to you against it. The house is to be completed within three years from the sale of the plot.

Hi

No, in such case capital gain exemption cannot be availed. The purchase of plot in your name is outside the time limit as specified under section 54F.

No, even in that case exemption shall not be available.

Exemption could have been availed if this plot was purchased by you within 1 year before the sale of the plot.

An option to save on the capital gains could be gifting your plot to your mother and then your mother constructs a house property on it. 

Yes. To make Construction in a plot in your name, first you should get the Mother's property transferred to you through Gift Deed.

The entire net proceeds from sale of Plot needs to be used for Construction of House. Any amount not utilized as on the Due date of filing IT Returns should be deposited in Capital Gains Account scheme and used for Construction. Time limit to complete Construction is 3 years from the date of Sale of the Plot