I bought a residential apartment on loan 3 years back. My mother recently has sold her flat which she owned for 10 years. If she doesn't invest in property again she will be subjected to capital gain tax. Now my question is if she pays off my loan amount and i gift deed my apartment to her, will she still be subjected to capital gain tax. Also will i be subjected to any capital gain tax. One more question what is the procedure for gift deed?
From the details of your query, you need to first execute a conditional gift deed in favour of your mother, for which you need to duly execute a gift deed by registering it in the local Sub Registrar office where you are situated. Your mother can repay your loan then and claim the same as investment and the transfer will not be considered as a capital gain in your case, but still much of the things depend on case to case basis and I suggest you contact a locally available CA for further course of action.
Dear Mr James, the capital gains exemption available to your mother is in respect of consideration paid for purchase of new property . Now as you want to gift your residential house to your mother, the same cannot be treated as purchase in her hand but she will merely be a donee. The repayment of your loan by her will not come to any rescue as this is not purchase consideration but only discharge of liabilities on a gifted property.