Capital gain tax on property baught

Dear Sir,

Hope you are doing well !!

Now, you brother can transfer the share of property to you through relinquish deed.

So, you can equally liable for capital gain tax and exemption.

Yes, it is valid.

Relinquishment deed is a legal document/instrument where a person legally or formally gives up or releases his legal rights of the said property being relinquished in the name of some other person. This is one of the modes of transferring rights of an immovable property. 

As a relinquishment deed is a legal document by which a person formally gives up his claim to another person, the said deed must be systematically executed and registered as per law depending upon the needed compliances as per the statutory governance.

Kindly note that one needs a good property lawyer for systematic legal compliances and needed documentations for drafting/making relinquishment.

You need to first make a deed where your brother will transfer half share to you by gift and then both of you would be liable for capital gain tax.

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Thank you

The fact that ownership of land belongs to both the brothers be mentioned in the sale deed, though only registered in ones name.  Also, the respective share of money should go to two separate accounts of brothers.  The income-tax act considers the real owner concept for capital gains and not the bookish one.

You must tell the seller to send the money to 2 accounts – your brother can give a written declaration specifying that the ownership belongs to you as well by will/heir and the fact that being a minor your name was not included. Even then if the buyer is hesitant, your brother can transfer the sale consideration of your part by bank to you and TDS credit by specifying it in his return filing.  We can discuss over a call if any confusion and manner of way forward.

Option 1

- Through gift deed, transfer share to the brother. In such a case, tax is not levied on either of the brother.

- Get your name added in the registry papers. It will involve some registration cost and stamp duty in respect to your share only. 

- At the time of sale, get the payments respectively in your accounts.

Option 2

- Let the elder brother sale it and share the proceeds with you along with the capital gain tax liability.

Hi

First option is to make a relinquishment deed or gift deed from your brother to you. However, this would involve costs.

It is better to get the sale proceeds in your brother's account. He may transfer you an amount net of capital gain taxes. This would be gift from brother which is exempt under the income tax act. 

For such division, you may enter into a written agreement with your brother in mutual consent.

Hello,

Your brother can transfer the share in the property through relinquishment deed or through a gift deed.

Or if you want to avoid this, your brother can sell the property in his name and transfer the consideration after netting the capital gain tax on your share.