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Capital gain tax

Moosa Tamijuddin (Finance and Project Controller) (115 Points)

05 July 2018

Hello all. I have the following enquiry which please help me with answers.

In 2009 I gave my sister some amount to purchase a land in her namewhich was divided into plots and a few of them sold already, Now I want the balance area to be totally sold out to a third party. Following are my queries:

1. If I take part of the land as a gift from my sister, what will be the effect on sales.

2. If I sell the entire property and give my sister's share to her, what will be the Capital Gain Tax amount for both of us?

3. If my sister is receiving a sizeable amount from me, how could she show the source of income?

4. I am an NRI and I want to minimize the Tax amount payable both for my sister and myself. How could I do it?

Thanks for your replies and advices.

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2 Replies

rama krishnan (12239 Points)
Replied 05 July 2018

1. gift from sister is exempted under section 56(2)(x) of the act. so no capital gain

2. capital gain will be charged only in your hands

3. if you give the amount as gift then no tax on the same. she can show it as gift from brother. but if it takes the character of money in lieu of land gifted by her to you, then capital gain tax will attract in the hands of your sister

4. instead of gifting entire portion of land, take one portion of land as gift and execute sale so that both of you can enjoy basic exemption limit if both of you have no income from any other head. you both can also invest in any residential property to avail 54f deduction or deposit 54ec bonds.

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