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Capital gain

Narendra mahadev hegde (ARTICLESHIP STUDENT) (246 Points)

12 March 2018

Mr.X transferred share to Mr.B is a son of Mr.X(not through Recognised Stock exchange) , consequently Mr.B transfer the share to his friend .....is Mr.A liable to Capital gain tax?

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10 Replies

CA Harshali Salvi (Practicing Chartered Accountant) (995 Points)
Replied 13 March 2018

Mr A not liable to capital gain. Because he doesn't have aNy relation with transaction between MRX Mr B and Mr.B's friend.

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abeertiwari (ca) (310 Points)
Replied 13 March 2018

for clarification who is Mr A????

Narendra mahadev hegde (ARTICLESHIP STUDENT) (246 Points)
Replied 13 March 2018

Read as Mr.X instead of Mr.A

abeertiwari (ca) (310 Points)
Replied 13 March 2018

if mr x purchased from recognised stock exchange with STT PAID..THEN IT IS EXEMPT...

Narendra mahadev hegde (ARTICLESHIP STUDENT) (246 Points)
Replied 13 March 2018

what would be your answer in case of property?
Thanks for your valuable suggestions...

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abeertiwari (ca) (310 Points)
Replied 13 March 2018

it depends which property and upon conditions....

CA Harshali Salvi (Practicing Chartered Accountant) (995 Points)
Replied 13 March 2018

yes . if it's transfer without consideration. FAir Market value shall be the full value of consideration.

abeertiwari (ca) (310 Points)
Replied 13 March 2018

No capital gain to Mr X will not be attracted because mr B is a son of Mr X ...the property has been transferred as a gift to Mr B.and gift received from relatives is exempt from tax

Narendra mahadev hegde (ARTICLESHIP STUDENT) (246 Points)
Replied 13 March 2018

@ harshali, I don't think so....by virtue of section 56(2)(x) Mr.X need not to pay Capital gain tax... because of both comes under relative... however sec 56(2)(x)Mr.B also (recipient) not require to pay tax....when Mr.B had transfer the property to his friend for consideration,then Mr.B has to pay tax upon period of holding....

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