Upgrad LLM

capital gains tax on gifted property


Dear All,

 

 

If I sell a house property which i have recieved as a gift from my brothers wife, will I have to pay capital gains tax?

In this case, what would be my purchase price for the property to compute the capital gain?

 

 
Reply   
 
Director

Yes, capital gain shall be levied in your hand. The purchase price shall be the same as it was in the hands of donor.

 
Reply   
 



Dear Vineetji,

The donor (i.e my bhabhi) has inherited the property on the event of death of my brother.

My brother bought the plot of land in 1979 and he constructed the ground floor in 1982

He constructed first floor in 1998.

 

Thanks a ton!

 
Reply   
 
Chartered accountant

The cost shall be taken as the cost to the previous owner. Please see Sec 49 which provides like this....

(1)] Where the capital asset became the property of the assessee, under a gift or will  then the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the assets incurred or borne by the previous owner or the assessee, as the case may be.

siva208@yahoo.com

 
Reply   
 
Director

I hope you got the answer. For you the cost shall be cost of land valued as on 1-4-1981 and subsequent expenditure incurred for construction in 1982 and 1998.

 
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Mr. Vineet & Sivadas,

Let me just add a point here. Pls refer sec 49 which states that in the event of a gift or a will or inheritance, cost shall be the cost to the previous owner. The previous owner here means the person who acquired the asset by means OTHER THAN u/s 49.

 
Reply   
 
Director

Thanks Mr Rahul


If you read the explanation to section 49(1) more precisely, it says that In this sub-section the expression “previous owner of the property” in relation to any capital asset owned by an assessee means the last previous owner of the capital asset who acquired it by a mode of acquisition other than that referred to in clause (i) or clause (ii) or clause (iii) or clause (iv) of this sub-section.

 

In the present case the last previous owner who acquired the property other than by any mode u/s 49(1) was the deceased brother. That is why if you kindly notice my reply, I have mentioned the cost of acquisition as if the the cost was in hand of deceased brother.

 

 

 
Reply   
 
Manager

@all

Cost part is clear.

can you confirm the date of acquisition (for Donee) is the same as date of acquisition of the Donor here?

Meaning, the Donee will incur LONG TERM capitalgain tax and not short term?

thanks

 
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