Regarding tax on property acquired by sucession

R_PVK (Querist) 16 July 2009 This query is : Resolved
Dear sir
My mother is likely to acquire a propery worth of Rs 39 lakh since she had filed for succession certificate after my uncles demise .The query to understand is that this property will be treated as gift? if so what will be the liable tax when the property sold today or a year after please give your expert advice
Regards
R_PVK

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A V Vishal (Expert) 16 July 2009
Sir

Under income tax act or the Gift Tax Act there is no tax liability on account of succession of the property by your mother. However, in case of sale there will be a liability to tax under IT Act on account of sale, the period of holding must be more than 3 years since it is a immoveable property and will qualify as LTCG, however if you intend disposing the property before 3 years you will attract STCG which is on a higher side.

R_PVK (Querist) 16 July 2009
dear sir
what will if my mother distributes her share to childrens after 3 years will that too will be treated as a gift for the receiver and if so the tax liable will be same
regards
prabhu

A V Vishal (Expert) 16 July 2009
In such situation she need not wait for 3 yrs if she intends gifting it to her children. However, you will have to bear stamp duty according to the prevailing rates applicable to the state where you reside on registering the gift deed.

R_PVK (Querist) 17 July 2009
Dear sir
Thanks for guiding & creating awareness in regard of the above mail send but another query is like the tax liability of the immovable property that what you replied and made aware to me is it the same applicable for movable property too say like ornaments,shares,and bank balances please suggest
Regards
R_PVK

A V Vishal (Expert) 17 July 2009
Gold ornaments for personal usage may be not taxable under capital gains, however, shares qualify for tax under capital gains.

R_PVK (Querist) 17 July 2009
Dear sir
As you had said that immovable property if sold within 3 years is bound to have tax liability higher and if sold after 3 years it may attract LTCG but my condition is different my mother is likely to acquire 2 row houses through sucession, the point is how she will distribute to 4 childrens is it by selling and giving to children as a gift in that case is it she liable to tax or to avoid this she has to gift to children where by two children has a joint holder of that property. pl advice
Regards
R_PVK

A V Vishal (Expert) 18 July 2009
She cannot sell it to distribute the proceeds to her children even as a gift, she has to gift her children as joint owners of the property.