cpc

can i gift property to my daughter after buying within 2 yrs


Hi,

I sold a property recently and bought another property within 1 year to cover for capital gains. Can I immidiatly gift it to my daughter? Is there a hold period?

Will it attract capital gains again?

Thanks for the response.

Troy

 
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ADVOCATE

Your Query: I sold a property recently and bought another property within 1 year to cover for capital gains. Can I immidiatly gift it to my daughter? Is there a hold period?

Will it attract capital gains again?

Reply: Yes, there is a no-transfer period of 3 years from the date of purchase of the new property as provided in Section 54F(3) of the Income tax Act 1961. If the new property is transferred within that period, the amount of Capital Gains (which had arisen from the earlier sale) will be deemed to be the income  (from Capital Gains) of the  year in which such new property is transerred. 

 
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Yes, You can Gift the property through a registered gift deed and it will not attract Capital Gain as Gift is out of the ambit of transfer.

 
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Advocate

You have already crossed the "imposition of Capital Gains", as you have already purchased another property within one year from the consideration amount of e already sold property. 

 
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If I understood Mr Rajagopalan suggestion. If I transfer my new property to my daughter within 3 years of my previous property sale, I am to pay capital gains. While Mr Baala is suggesting that I do not need to pay?

To explain again my example.

I sold Property ONE Jan 1st 2012 and bought Property TWO Jan 1st 2013 to satisfy Property ONE sale capital gains requirements.

But if I GIFT transfer Property TWO to my daughter Jan 1st 2014 will it incur capital gains from Property ONE

 
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Dear my answer to the query remains same. There is no liability of Capital gain. If you want i can elobrate on the present situation, my submission is the same.  In the present case there is no liability on account of CAPITAL GAIN.

 
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Practicing Lawyer

Dear,

Your query is incomplete with regards to the facts whether original capital gain was on account of sale of residential property chargeable u/s 54 or from any other long term asset chargeable u/s 54F.

In the later case, if you transfer your new asset within a period of three years, you are liable for withdrawl of exemption already allowed to you.

 
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GIFTING PROPERTY IS COVERED BY SEC 47(iii) of Indian Income Tax

 
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Per some research, there seem to be some issue with transfer of the new acquired property within 3 years of purchase. 

http://finanace.indiamart.com/taxation/income_tax/tax_income_capitalgains.html

Read: statement that says: "What are the consequences if a new house is transferred within 3 years? "

But there is another issue. gifting or inheritence is not considered as "transfer" per capital gains.

I am confused. Can I gift the newly acquired property using funds from previous property sale within the year after new purchase.

Thanks a lot for all the responses and help

 
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