Money received on account of property released

Money received on account of property released

Hi,
I had received a sum of money as settlement in divorce, in return for the release of a property that was held jointly by me and my husband. I released the property to my husband as settlement and not sale. What tax percentage will i be liable? And how do i save on the taxes.
Inputs much appreciated.
Thanks.

Asked 8 years ago in Capital Gains Tax

In my opinion it should be taxed as capital gain. Since, you have given up the right in the property to your husband. If it's capital gain then it will be taxed @ 20% assuming it's long term.

We're you joint owner of the property?

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

Thanks and Regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar

CA, Mumbai

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Talk to Abhishek Dugar

However as a general principal any amount received in the nature of capital receipt as a part of alimony is not taxable.

Hence it is essential to find out the nature of the money received by looking at the settlement agreements

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

Thanks and Regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

Talk to Abhishek Dugar

Hi,
Thank you for the quick response. Yes i was the joint owner of the property. We have an agreement signed stating the sum transferred as a settlement on the property and my husband is not liable to pay anything beyond this as part of the divorce settlement. So how will this gain be categorized and how do i minimize on the taxes?
Thanks.

Asked 8 years ago

Hii

This transaction is not taxable and thus it's capital receipts in your hand

You have not transferred a capital asset thus no cap gain

Lalit Bansal

CA, Delhi

776 Answers

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Talk to Lalit Bansal

Thank you for the response. Much appreciated.

Asked 8 years ago

The amount you received as part of settlement is treated as Sale Proceeds and capital gains tax calculated accordingly. But here 50C will come into picture which means the government value or amount received on settlement which ever is higher which will be taken as sale proceeds.