Purchase & sale of property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 October 2014 Dear Experts,

Purchased two property 5 yr back for 42 lakh & 35 lakh now selling it for approx 72 lakh & 45 lakh Respectively.

1. Please suggest the appropriate method for saving cap gain tax,other than exemption u/s 54 if any because the exemption is not going to apply because the sale consideration received is not utilized(to be used for personal purpose) , is there any method to save tax by cost of improvement ?? OR please specify any other method to save capital gain tax on above sale.

2. If capital gain tax is paid as per law on above sale of two properties & the sale consideration is received then is it possible to gift it to parents(father & mother) & to married sister & if possible then to what extent without any tax implications.please specify the limits.

Thankyou very in advance.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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05 October 2014 1. you can add expenses incurred for improvements made, if any, to the cost. This shall reduce the capital gains to some extent.

2. remember the cost incurred for purchase and improvement needs to be indexed before arriving at indexed cost.

3. the difference between sale consideration and indexed cost is the capital gains.

4. If there are capital gains and you dont invest it in accordance to sections like 54/54F, 54EC etc, you need to pay capital gains.

5. once capital gains are paid, you can gift the consideration to your parents, sister etc. They wont have to pay any tax on this gift.

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