Tax on inherited property
Rohit Telang
(Querist) 04 May 2012
This query is : Resolved
Sir,
Iam staying in Mumbai with my widowed mother,my wife and son in a Cooperative housing society.The flat in which we stay was purchased by my late father in 1973.My father died 3years ago without a will.I have one married sister.After my fathers death The societies share certificate was transferred in my mothers name as she was the nominee.Now instead of selling the flat for division of inherited property,my sister is willing to pay me 60% of the current market value and I will relinquish my claim on the share of the propety(Flat).The flat will be transferred in my sister name or jointly with my mother.Following are my questions.
1.How should we go about it to avoid paying stamp Duty and Taxes
2.Shall I have to pay any tax on the money I receive from my sister and if yes how much
3.Can we do this by way of Gift from one party to other?
4.Can I purchase a new property to avoid paying any capital gains tax?
5.As I want to purchase a commercial shop with the money I receive,Do I have to pay a
tax before purchasing the shop?
I and my sister are nominees in the share certificate of the flat.
Please advise me urgently.
Rohit Telang
Suhail A.Siddiqui
(Expert) 04 May 2012
1.How should we go about it to avoid paying stamp Duty and Taxes.
Ans: In case it is immovable transfer more then Rs.100 Stamp duty can not avoid.
2.Shall I have to pay any tax on the money I receive from my sister and if yes how much
Ans: In case it is consideration, you are liable for Capital gain Tax and if it is gift there is no tax.
3.Can we do this by way of Gift from one party to other?
Ans: You can give/get these in gift,which is not taxable in blood relation.
4.Can I purchase a new property to avoid paying any capital gains tax?
Ans: You can purchase new house to avoid Capital Gain tax.
5.As I want to purchase a commercial shop with the money I receive,Do I have to pay a
tax before purchasing the shop?
Ans: If it is gift from sister there is no tax and you can purchase shop.
ajay sethi
(Expert) 04 May 2012
you can execute deed of relinquishment . it attracts nominal stamp duty . get it regstered .
in th alternative you can aexecute gift deed . stmap duty is again nominal rate .
you cn apurchase new property to avoid capital gains tax
C. P. CHUGH
(Expert) 04 May 2012
Dear Rohit,
You have asked so many presumptive questions without giving much details. Since the property in question was acquired before 01-04-1981, first step should be to get it evaluated as on 01-04-1981. Second step should be to know the present circle rate/stamp duty value of the property. Find out whether any gains arises (at all) after reducing the indexed cost of acquisition from deemed sales consideration.
If the Answer is NO, rest of your questions are immaterial.
If the answer comes to YES, then
Q1.How should we go about it to avoid paying stamp Duty and Taxes
Ans: Be a responsible Citizen, Pay whatever duty is payable as per local
State Laws. Do not think of avoiding it. However you may reduce the burden by adopting alternate method of registration viz registering a relinquishment deed-cum-family settlement.
Q2.Shall I have to pay any tax on the money I receive from my sister and if yes how much
Ans : As stated above, Yes, if there is any Capital Gain. Tax shall be chargeable at a Flat rate of 20% of Net Capital Gain calculated.
Q3.Can we do this by way of Gift from one party to other?
Ans : Yes, the present law permit it without attracting any tax liability.
Q4.Can I purchase a new property to avoid paying any capital gains tax?
Ans : Yes you can invest in new residential property either by acquiring it in two years or by constructing it in three years, subject to provisions of section 54, however, in case you already own more than two residential houses prior to your acquisition or construction of New House, as stated earlier, the deduction shall not be available to you.
Q5.As I want to purchase a commercial shop with the money I receive,Do I have to pay a tax before purchasing the shop?
Ans : No deduction shall be available to you for purchase of a commercial property and hence the entire Capital Gain Tax, if any, as calculated above shall be payable.
Shonee Kapoor
(Expert) 05 May 2012
I agree with all experts.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
