regarding property gifting
R_PVK
(Querist) 07 July 2010
This query is : Resolved
Dear Sir
My mother had acquired two row houses of her brother asset worth of 1 crore and letter of administration is been issued thru madras high court . she is very old nearing 80 and she wants to distributed the asserts to the children of 5 from her family as well as to 3 of her big brother family for that we had already got permission for sell out from court as the result of this one clarification required is whether if this is sold within a year what is the tax liable, and if the money is distributed to her children and brothers children ,whoever receives it whether they have to pay tax or if suppose the tax is to be paid by the receiver whether it can be gifted to children as a gift to avoid it inspite of court permission to sell it out
please suggest
regards
R_PVK
Vineet
(Expert) 07 July 2010
The sale of property shall be subject to liability of capital gains tax. Computation of such liability depends upon the cost of acquisition of property by your uncle, date on which such property was purchased. The liability of tax will arise in the hands of seller i.e. your mother if she has inherited these properties or the estate of your uncle if the same is assessed as such with your mother as administrator.
There will be no tax liability in the hands of recipients being children of your mother and children of your uncle if the sale consideration is further distributed.
