Yes. They can do so
Capital Gains tax saving on joint property purchase
A property jointly owned by two people (Mother and Daughter) is sold. The Gains from the property sale is split between the two and is parked in individual capital gains accounts. In order to save the capital gains tax, both mother and daughter are planning to jointly purchase a new property. Please let us know if both mother and daughter can jointly purchase a single property to save their individual capital gains taxes.
Asked 6 years ago in Capital Gains Tax
Yes, investment can be made in single property in joint ownership to claim capital gains exemption.
Yes they can do do. Till the time total capital gains is reinvested in a residential property it should be fine.
Regards,
Nikhil
Post the purchase, the daughter wants to gift her share of the new property thro' a gift deed. The mother intends to give back the money spent by the daughter on the property(house) purchase in the form of gift. 1) Is the above approach acceptable ? 2) Is there a time frame for which the two of them have to wait before they gift each other in the above indicated manner. 3) What is the cost involved in completely transfer the property to the mother's name thro' gift deed.
Asked 6 years ago
The new property cannot be transferred upto 3 years of holding. However, money can be gifted.
Hi,
The property cannot be transferred for the next 3 years else the capital gains will become taxable.
However, monies can be gifted without any tax liability.
Regards,
Nikhil
Dear Sir,
1) Yes joint investment in single property is entitled for exemption but the registry documents should specify the share of investments precisely.
2) New house purchased can not be transferred within 3 years from the date of transfer. Money can be transferred by mother to daughter through gift deed.
Thanks
Yes, both the owners can jointly purchase a new property to save tax.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Technically there is nothing which stops you from doing above gift arrangement. However, we would recommend you to do both the transactions in different assessment year.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Some of the responses are pointing to 3 year lock in period before the property is transferred. Is this lock in period applicable even for a gift transfer from a daughter to her mother ? The 3 year lock in period for a resale is clear. Here, in our case, there is no resale involved.
Asked 6 years ago
The lock in period of 3 years shall be applicable for gift also. It is applicable on transfer of property and not just on sale and gift shall amount to transfer.
It is advisable to not gift before 3 years as it may amount to transfer and hence liable for capital gains tax.
Regards,
Nikhil
Yes, this lock in of 3 years applies even to gift.
So you can't gift it within 3 years.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
1) Daughter can gift her share to mother anytime. There is no restriction of 3 years in case of gift.
2) Mother can transfer money to daughter anytime.There is no restriction of 3 years in case of gift
3) Some of the responses are pointing to 3 year lock in period before the property is transferred - I don't think there is any such clause in law.
4) Gift deed can be prepared on plain paper or stamp paper with registration.To make it full proof go for stamp paper gift deed.
Thanks
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