Gift deed

Hi,

Since both the Father and the Son have brought another Property (I assume it is a House. Otherwise the benefit of Section 54/54F as the case may be won't be applicable), the basic condition prescribed by Section 54/54F is fulfilled.

The condition differs when the original asset sold was a House used for Residence (Section 54) or property other than Residential House (Section 54F).

There is no restriction on transfer of the new house purchased as per Section 54. However Section 54F restricts buying/construction of a another House other than the new House Purchased or Transferring the New House so purchased. I cannot answer the question fully as the facts are not sufficient.

Also, in case the assessees want to gift the house to the Son's wife, why make 2 Gift Deeds and pay additional Stamp Duty and Registration Fees twice? Both the father and son can Gift the entire property to her via a single Gift Deed as she is the Daughter-in-law of the Father and the Wife of the Son.

Hello Sir,

No, Capital gain shall not be applicable but yes, govt taxes like stamp duty etc shall be payable.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Sir in your case till the father gifts his son is ok. But the son as we suggest should not gift his wife the property. To father and son no tax liability will accrue. It is exempt.

Dear Sir,

No tax liability will accrue to the father for gifting the property to son.

Please feel free to call/revert in case of any doubts

Thanks and Regards

Abhishek Dugar

CA CS B.Com

There will not be any capital gains tax on the gift of property.

Capital Gains will arise to the donee, only when the asset is sold. The cost of the property to the donor will be taken as the cost of the property to the donee also. The benefit of indexation will apply from the date of acquisition to the donor.

When the son is gifting the property to his wife, the rental income, if any, will be taxed in the hands of the son under the clubbing provisions.

Dear sir,

Capital Gain is not applicable on any transactions subject to proper gift deed execution. However any income earned out of the letting out this house or sell of this house shall be clubbed with the income of husband only and not to wife. Also an important consideration is payment of stamp duty at every stage. i.e. at the time of father gifting it to son. Another Stamp duty while gifting from husband to wife.