CA Ksheerabthi Nathan (CA in practise) (167 Points)
30 September 2011if a person transfers the property to his spouse for inadequate consideration and if the spouse sells the property,capital gains is to be taxed in the hands of transferor.but for indexation benefit,which year should be taken ?either purchase year or transfer year
Harshal Fifadra
(Chartered Accountant)
(1489 Points)
Replied 30 September 2011
According to the provisions of the CAPITAL GAINS TAX the year that needs to be taken for the indexation benefit is the TRANSFER YEAR . The purchase year has to be taken in case if the property has been obtained as per section 49 (1) . However the capital gains would be clubbed in the hands of the person who transferred it .
Hope you are convinced ?
ashish gupta
( student)
(1922 Points)
Replied 01 October 2011
In my opinion purchase year should be taken for indexation. As transfer to spouse without adequate consideration is not a transfer of assets for the purpose of capital gain and the taxable event is only when wife sells the property. Though Capital Gain would be clubed with the income of husband but first it will be caclutaed as if it belongs to the spouse.
And in these cases period of holding is taken from the date of purchase of assets and the year of indexation should also be the same.
Preety Parik
(chartered accountant)
(762 Points)
Replied 02 October 2011
(assuming that the transfer is by a husband to his wife)
Transfer by husband to wife without adequate consideration is not a tranfer. Hence, Sales consideration will be charged in husband's income and Cost of indexation will be taken in the year of purchase by the husband.
CA Hardik Bunha
(self)
(2121 Points)
Replied 02 October 2011
Here consideration is missing..........
inadequate consideration is not valid for transfer......
capital gain will be taxble in the hand of husband no transfer date will be considered
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
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