Real estate gift - tax planning
This query is : Resolved
07 February 2012
My wife and I are NRIs (retired), since 1982. My wife wants to gift me her house in Chennai shortly. She acquired the land in 1979 and built the house in 1981, all of it costing Rs. 3 lacs, out of her own funds. My wife is a home maker and has never filed a tax return. I have been filing ITR due to my Mutual Fund Investment in India. I have no other income, other than from MFs.
If I sell the house this year for about Rs. 2 cr,
1) Will the indexation base 1981 as the year of construction or the year of the gift I will receive be used for capital gain calculation?
2) I have carried forward losses both short term and long term (from Mutual fund transactions) of Rs. 30 lakhs. Will I be able to set off the losses against capital gain?
If I sell the house this year for about Rs. 2 cr,
1) Will the indexation base 1981 as the year of construction or the year of the gift I will receive be used for capital gain calculation?
2) I have carried forward losses both short term and long term (from Mutual fund transactions) of Rs. 30 lakhs. Will I be able to set off the losses against capital gain?
08 February 2012
1. capital gain will be computed taking 1981 as base in terms of Bombay High Court decision in the case of Manjula J Shah case
2. U will be able to set off the losses of 3o lakhs against the LTCG arising from sale of house
CA MANOJ GUPTA
JODHPUR
9828510543
2. U will be able to set off the losses of 3o lakhs against the LTCG arising from sale of house
CA MANOJ GUPTA
JODHPUR
9828510543
08 February 2012
Dear Shri Gupta,
Thanks very much for your time and advice. I need further clarifiaction of a doubt, which I hope you can help me with:
According to Sec 62 of the IT Act, in respect of gifts received by wife from the husband, the father-in-law or the mother-in-law, the income arising directly or indirectly from the gifts would not be considered as her income but that of person who gifted, for the purpose of levy of income-tax.
Will the same rule be applied in reverse, that is: for gift received by husband from wife, income (or capital gain in this case) arising directly or indirectly from the gift would not be considered as my (husband's) income, but my wife's income?
Kind regards,
Narayan
Dear Shri Gupta,
Thanks very much for your time and advice. I need further clarifiaction of a doubt, which I hope you can help me with:
According to Sec 62 of the IT Act, in respect of gifts received by wife from the husband, the father-in-law or the mother-in-law, the income arising directly or indirectly from the gifts would not be considered as her income but that of person who gifted, for the purpose of levy of income-tax.
Will the same rule be applied in reverse, that is: for gift received by husband from wife, income (or capital gain in this case) arising directly or indirectly from the gift would not be considered as my (husband's) income, but my wife's income?
Kind regards,
Narayan
09 February 2012
Sorry sorry sorry
I forgot to mention that by virtue of section 64(1)(ii) the capital gain so arising will be taxed in the hands of your wife and thence u will not be eligible to set off refferred above. The provision is applicable both ways that is tr fm husband to wife and vice versa
I forgot to mention that by virtue of section 64(1)(ii) the capital gain so arising will be taxed in the hands of your wife and thence u will not be eligible to set off refferred above. The provision is applicable both ways that is tr fm husband to wife and vice versa
14 February 2012
Dear Shri Gupta,
Tahnk you for clarifying.
I kindly request for your expert opinion on the following:
My wife and I have executed a Family Trust comprising real estate and mutual funds properties. Both of us are co-trustees and we retain control over the properties. Our NRI son is named as the beneficiary after our demise.
We want to sell a residential property that was previously my wife's property, but now registered as Trust property.
1) Who will account for the tax on the LTCG arising out of the sale, the Family Trust as the entity or my wife as the previous owner of the property?
2) If it is the Trust who will account for the LTCG tax, will it be eligible for the LTCG tax exemptions through investment in the certain specified bonds and in a residential house?
Tahnk you for clarifying.
I kindly request for your expert opinion on the following:
My wife and I have executed a Family Trust comprising real estate and mutual funds properties. Both of us are co-trustees and we retain control over the properties. Our NRI son is named as the beneficiary after our demise.
We want to sell a residential property that was previously my wife's property, but now registered as Trust property.
1) Who will account for the tax on the LTCG arising out of the sale, the Family Trust as the entity or my wife as the previous owner of the property?
2) If it is the Trust who will account for the LTCG tax, will it be eligible for the LTCG tax exemptions through investment in the certain specified bonds and in a residential house?
02 April 2012
Dear Sir, The residential house that my wife bought in 1980 costed Rs. 5 lakhs. She expects to sell it for 1 cr 92 lakhs.
If she does not avail of any of the capital gain exemptions, what is the tax she will be required to pay on the sale of the property?
She is 60 years old and does not have any other income.
If she does not avail of any of the capital gain exemptions, what is the tax she will be required to pay on the sale of the property?
She is 60 years old and does not have any other income.
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