Capital gains on property received as gift

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Anoop Chitkara (Querist)
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01 May 2017 A gifted his residential flat in urban area to his sons B&C. Now B&C want to sell it. On what amount capital gains tax will be paid? The amount on which tax registration fee was paid? or The cost of purchase by A? Would inflationary deductions be available in both scenarios?

CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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01 May 2017 Gift received by son from Father is not considered as transfer and hence exempt from capital gain tax, but in future when son sells such gifted property then price at which it was purchased by original buyer i.e father is to be taken as purchase value or cost of acquisition.
So, as per given case price at which property was purchased by A is considered as purchase value.

As far as inflationary deductions are concerned as such no specific deduction is available but purchase value or Cost of acquisition is to be indexed so that it covers inflation also and indexed cost of acquisition ios to be taken