LTCG on residential property gifted to wife

1) She is eligible for LTCG.

2) Yes she can claim benefit u/s 54

3) Your wife should accept the sale proceeds.

Hi,

1. Yes she will be subject to LTCG

2.she canclaim Sec 54 benefits

3.it is fine if she takes the sale priceeds as she can claim the indexation benefirt and there will be minimal tax.

Regards,

Nikhil

Hi

Clubbing shall be applicable. Capital Gains shall be clubbed to your income. You can claim 54 exemption.

Since property is in her name, sale proceeds shall be received in her account only.

Since property is on her name now ,she claim take the sale proceeds ,can take benefit of sec 54.

When you have gifted the property to your wife in June 2017, she become the owner of the property and any subsequent capital gain from sale of the aforesaid property shall be taxable in your wife's hands.

1) Yes she is eligible for Long Term Capital Gain. As the property is held for more than 36 months from the acquisition date Capital Gain will be termed as long-term capital gains (LTCG). For this purpose, the cost of acquisition shall be the cost at which you acquired the property.

2) Yes, She can claim Sec 54 benefit. (Clubbing provision would not be applicable here)

3) She should accept the 100% sale proceeds of the property.

1. Hi, yes exempt under section 54 will be allowed and post that income will be clubbed in your return.

2. Need to check

3. Ideally, she will be receiving the money as she is the owner of the house. Only for income tax purposes, income will be clubbed in your tax return.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Hi,

Answers are as below:

1) Your wife shall be eligible for benefit of re-investment of the amount in acquisition of new property. But capital gains in her hand (for exemption purposes only) shall be the cost of acquisition to you. She cannot claim the same from the year 2017 (as when you gifted her the same).

2) Technically speaking you should only do LTCG as well as exemption of the same. But, if you want your wife can also claim the benefit, since AO will be tax neutral, whether after clubbing or before clubbing.

3) Please follow simple steps and don't try to trick the taxmen. Whosoever you wish to show as the beneficial owner (whether you before gift or your wife after gift) should accept the sale proceeds.

It is advisable not to go for gift and all such things. Just sell in your name, claim tax benefit u/s 54 after acquisition of new property. New property can be registered in your and your wife's name jointly or solely in your wife's name, if you want to avail any stamp duty benefit. You can apply clubbing rule at that time also.

Regards,

Hi,

Clubbing provision cannot be invoked for gift of duly registered immovable property.

Since you gifted 100% share in property, your wife is the sole owner. So, only she should take the sales proceeds and it will be Capital Gains in her hands only.

In case of gifted or inherited property, the cost of acquisition for the purpose of Capital Gains will be the cost incurred by original owner. So, though your wife didn't pay any amount for the Property, the original cost i.e 50 Lac will be her cost of acquisition for computing Capital Gains

Hello,

1. Yes, she is elligible for Capital Gain Benefit.

2. She should claim as she is the owner now.

3. She will accept the proceeds.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP