Capital gains on gift deed

Querist : Anonymous (Querist) 23 October 2020 This query is : Resolved
Respected Sir, Madam

For the last 8 years I have been staying at my flat which is presently owned by my grandmother (paternal). She has now decided to gift me this flat. I am US citizen and plan to eventually move back to my home country.

If I sell this property will I be subject to capital gains? If so by what percentage? How can I avoid excessive taxation?

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Quick Summary

Receiving a property as a gift can have capital gains tax implications when you eventually sell it. While gift tax itself might not apply if the gift is from a direct ancestor like a grandmother, selling the property could trigger capital gains tax. The rate can be substantial, especially if sold within three years of receiving the gift. However, there are potential exemptions, such as reinvesting the proceeds into another property. It's highly recommended to consult with a local tax professional to understand your specific situation and explore tax-saving strategies.

Dr J C Vashista (Expert) 23 October 2020
It would be better to contact and consult a local prudent chartered accountant / taxation lawyer for appreciation of facts/ documents and professional advise. or
Post your query in CA Club for obligation.

Rajendra K Goyal (Expert) 23 October 2020
Capital gain tax has to be paid on selling a property which was received by gift.

To minimize the tax burden discuss in detail with some tax consultant.

kavksatyanarayana (Expert) 23 October 2020
Gift tax shall be paid. If you do not interest to pay tax, your grandmother may execute a Will in your favour which comes to your enjoyment with full rights only after her demise.

Rajendra K Goyal (Expert) 24 October 2020
Gift tax is not payable if property is received in gift from lineal ascendant or descendant of the individual. Paternal grandmother is covered.

Hemant Agarwal (Expert) 24 October 2020
1. A Non-Indian citizen holding foreign passport, can accept Gift of immovable property ONLY AFTER obtaining relevant permission of RBI. There are several other parameters applicable on such transactions.

2. Capital Gains of nearly 35% is payable IF sold within Three years of date of Gift Deed. However, this can be 100% exempted IF 100% proceeds are invested in another immovable property within Two years.

Keep Smiling .... Hemant Agarwal
VISIT: www.chshelpforum.com

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