Capital gains on sale of plot

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

14 March 2016 RELEVANT FACTS OF THE CASE
An Individual got a Plot of Land allotted in his name from HUDA in Haryana in F.Y 1991-92 at the allotment cost of Rs. 175,000/- ,which were duly paid in full via instalments each year till F.Y 1998-99 and got the possession in F.Y 2000-01.
In F.Y 2009-10, Individual transferred the said plot of land via family transfer permission under HUDA and the said plot of land was re-allotted in his wife’s name via conveyance deed registered at transfer value of Rs. 201,000/- and Rs. 6,000/- was paid as registration fees. However, in actual, no consideration was paid for the above transfer and now, wife wants to sell this plot of land in F.Y 2015-16.

QUERY
I would like to know your suggestions on the following below mentioned points:-
a) Whether the above transfer between husband and wife be termed as exempt transfer (gift of immovable property) u/s 56(2)(vii) ?
b) Whether, wife can claim Cost of indexation as per section 49(1) and period of holding as per section 2(42A) of the said plot of land?
c) Whether, clubbing provisions will apply in above case in above case of transfer of land for inadequate consideration ?

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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15 March 2016 In answering the above query, I would like to know how the transaction was treated in the ITR of the husband for A.Y. 2010 - 11 (F.Y.2009 -10).

Was the transfer disclosed to the Department? Was it a sale or a gift? If gift was the relevant provisions of the I.T.Act followed?

Section 64 would apply for gifts to spouse and the income from the gifted amount would be clubbed in the hands of the donor. So if in Departmental Records the transfer was shown as gift, the Capital Gains would be taxable in the hands of the husband. The husband can claim indexation benefit from 1998 - 99 on Rs.175.000/- (pro-rata on payment from 1998-99) and on Rs.32,000 (201000-175000+6000) from 2009 - 10.

If the transfer was shown as an outright sale and accepted by the Department then the wife can claim indexation benefit from 2009 - 10 on Rs.207,000/- and the liability for payment of capital gains tax would be hers.

gautam thakur

gautam thakur (Querist)
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16 March 2016 sir, actually it was transferred under family transfer and was realloted in wife name in 2009. It was not disclosed in 2009 return of any person and neither any gift deed was made separtely. only conveyance deed was issued in name of wife and was registered with HUDA.

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