Capital gain on gifted residential property

 I am not sure about the status after gifting. 

You as a inhertor can claim LTCG from 1985 only at 1 lk

Rest three of persons  have acquired rights  in 2015-16

So I m not sure of LTCG or STCG for them. 

you should ask a good Lawyer cum tax consultant.

Gift will not reduce taxes in CG in any way as it is not treated as transfer. Off couse once it is gifted and then sold, some amount of benefit will accrue if the receivers are not having any income, through some basic exemption limit... but cost of registering gift deeds and stamp duty payable on that is too high for any such benefit. Sell your property, receive your money, pay taxes @ 10% and enjoy. One cannot enjoy money without paying taxes.

Well, coming to law. It is not known how did you inherited the property, I mean on demise of your father your mother ought to have got a share in property.... if it is possible, treat the property as an HUF property. Make a partition deed (you, your mother, your daughter will get 1/3 share each; daughters are coparceners in HUF). A simple partition deed can do the work. The buyer of the property can make three cheques separately in the name of coparceners. Three of you can invest 50L each under 54EC. Balance Capital Gain tax can be paid by TDS deducted on sale of property.  

I inherited the flat as I was sole nominee. My mother had signed release deed in my favour. 

LTCG is 10% or 20% on residential flat?

My father expired 5 years back. the flat was solely in his name. Can I create HUF now? -involving my mother in HUF?

 I am not sure whether a Non- Hindu can create HUF. 

LTCG tax is 20% and consideration will be tune of 38-40 lakhs. 

Experts please give ur  opinion also

@ Ronnie  Please post in lawyers forum also 

www.lawyersclubindia.com/forum

@ Ronnie:

It is better to gift a share of property rather than gifting proceeds of property sold.

Coming to the point of stamp duty and registration of gifting of immovable property to family will not attract stamp duty in Maharashtra, which means if your property is in Maharashtra, then you will be saved from paying heavy stamp duty. Refer the articles reference. Do not know about other states. Need to refer yourself.

https://consumerresources.in/2015/05/21/no-stamp-duty-required-for-transfer-of-property-to-relatives/

https://indianexpress.com/article/cities/mumbai/now-no-stamp-duty-in-state-on-gifting-property-to-heir/

https://accommodationtimes.com/no-stamp-duty-required-for-registration-of-gift-deed-between-blood-relatives/comment-page-1/

Now when the property is by way of gift, the holding period and the cost will be the same as it was to the previous owner. Here in this case, your father gifted you. Therefore the cost will be 1lac and indexed cost comes to around 8.2 lacs. The indexed cost will be apportioned among your family members on gifting. The property was inherited to you 5 years back. In case of your wife, mother and daughter, their period of holding will be same as yours and also the cost. Therefore total CG will be around 1.92 crores. Individual calculations have to be made for all. Now if this CG is invested in 54 EC bonds, then individually each of them have to invest around 48 lacs to avoid tax liabilty of around 20% on the gains earned. Note that interest earned from these bonds are subject to taxation and TDs provisions.

Hope I m able to solve your problem

Capital gains will be around   1.92 crores if selling price is 2 cr. 

Thanks. 

Is it necessary that donee should hold the flat for at least 3 years to avail LTCG?

As LTCG will be aout Rs 1.92 cr., 4 owners of the flat can then deposit ~ Rs 50 lacs each in bond thereby saving 20% tax. 

When the flat will be sold, the Cap. gain then accured to my wife will be clubbed to my income? Is that so?

No ! The date of acquisistion will be  1985  for donee same as Doner.

Each one of you can have a PAN and file seperate return.

1. Donee need not hold it for 3 years as holding period would be the same as that of the donor

2. But be cautious, while you sell your flats, bonds should be available at that point of time.i.e. You may also note that the investment in bonds for the purpose of claiming exemption under Section 54EC has to be made within six months from the date of transfer of the capital asset for the purpose of benefiting from the exemption under Section 54EC. Even if bonds are not notified and if you are unable to invest within the stipulated time due to this reason, the benefit of the exemption under Section 54EC would be lost.

3. Yes the income of cg after allowing exemption u/s 54ec will be clubbed in the hands of spouse.(here you). 

Refering this case law for claiming exemption u/s 54ec

DCIT v. Rajeev Goyal

Capital gains – Investment in bonds – Beneficial owners – Clubbing of income –
Separate exemption is available in respect of income clubbed under section 64 [S. 64]

The assessee earned long term capital gain on sale of shares. The two children of assessee, being beneficial owners also earned LTCG on sale of beneficial shares. The assessee along with his minor children invested amount of long term capital gain in REC bonds and claimed deduction under section 54EC. The Assessing Officer clubbed the income of the minor children in the hands of the assessee but disallowed the claim of deduction on account of minor children. It was held that in case of clubbing of minor/ spouse, all deductions are to be allowed while computing income of minor/spouse and only net taxable income to be clubbed under section 64. Therefore, where income of assessee’s minor children was clubbed with his income, assessee was eligible for deduction under section 54EC on investment in REC capital gain bonds on account of minor’s income from long term capital gains separately. (A.Y. 2007-08)