This has brought me to reconsider the development agreement and think about selling the property completely. Here also I have been in a bit of confusion on the type of Capital Gains I might have to end up paying, long term or short term? What would be the options to save any SCG tax, would I be able to invest on more than one property if I have SCG implications?
Any immovable property received by an individual from any person during any financial year (FY) without consideration, the stamp duty value of which exceeds Rs.50,000, is taxable under the head “income from other sources” in the hands of the recipient. However, an exemption can be claimed if the said property is received from a relative which includes, among others, the mother of an individual. Accordingly, there should not be any tax implications for either.
You may maintain the necessary documentation/registration with respect to the gift transaction.
Any subsequent capital gain from sale of the aforesaid property shall be taxable in your hands. The capital gain taxability in respect of property depends upon the period of holding of the property.
If the property is held for more than 36 months from the acquisition date, then the resulting gains, if any, are termed as long-term capital gains (LTCG). In case of gifted property, the period of holding is reckoned from the date of purchase of property by the owner who has actually acquired the property, other than by way of inheritance, gift, and so on.
As the property has been originally acquired by your grandmother, the period of holding will be reckoned from the date of acquisition of the same by your grandmother.
If you desire to invest in more than one property, you may not be eligible to claim exemptions under section 54 of the act.