Sale of property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2014 Can a son gift a plot of land to his father & once the plot is registered in the name of father can it be sold off..? what are the tax implications ?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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02 January 2014 1. Yes a person can gift land to his father.

At the time of gift, there will be NO tax implication in the hands of both the son & the father.

(a) Gift is NOT treated as transfer and accordingly capital gain will NOT arise in the hands of the son.

(b) Gift from relatives is not taxable by virtue of Section 56(2)(vii). Accordingly there will be no tax liability in the hands of the father.

2. When the father transfers the land, capital gain will arise in the hands of the father.

Cost of acquisition & period of holding in the hands of the father will be the same as in the hands of the son.

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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02 January 2014 Yes, a son can gift its property to his father, as the father comes under the purview of relative..

The cost of acquisition is to be taken as the cost to the previous owner, the period of holding by the previous owner should also be considered.

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Querist : Anonymous

Querist : Anonymous (Querist)

09 January 2014 Thank you for the replies posted... further i would like to know is there any time period for which the father is required to hold the property gifted by his son before sale..?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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11 January 2014 There is no restriction on the time period for holding the asset.

The father can sell the asset immediately or hold it for a long period.

Querist : Anonymous

Querist : Anonymous (Querist)

11 January 2014 Thank You very much to Mr. Siddhartha Bhardwaj & Mr. Aryan Singhania

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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14 January 2014 You are welcome. You should use the thanks button to convey your thanks.

Querist : Anonymous

Querist : Anonymous (Querist)

12 February 2014 Another query i would like to add is can a person gift a house to his wife.. although he had already made a gift of house to his wife several years ago..so this would be his second gift of house to the same person ..? and is he liable to any gift tax payable ?

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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17 February 2014 1. Yes a person can gift a house to his wife.
2. Gift tax has been abolished and is no longer applicable.
3. However, where a person transfers house property to his wife without consideration, then the person is treated as the deemed owner of the property and he will have to offer income under house property to tax.