• Sell my share in an apartment to my mother

Backgorund: 

1. My father has purchased a flat in Noida in 1995 which passed on to my mother in whole after his demise in 2008. She got the name transferred in 2014 and sold the apartment next year in 2015. 

2. The proceeds of the sale was parked in CGAS (Capital Gains Account Scheme) Term deposit which is set to mature in may 2017. As I understand, she needs to invest this money in a real estate venture before that. 

3. I had purchased a flat in kolkata, jointly, with my father in 2006. After my father's demise, I am assuming I am 75% owner of the flat and my mother is 25% owner. 

Questions: 

1. Can I sell my 75% share to my mother ? Are there any tax or legal implication concerning that ? I intend to use that money to pay installment in another apparent that I purchased a year back.

2. Are there any legal or tax implication i I gift her an amount equal to the sale price of my 75% share?
Asked 4 years ago in Property Law
Religion: Hindu

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10 Answers

You are at liberty to sell your 75 per cent share in flat to your mother

2) your sale would attract long term capital gains as you have held flat for more than 2 years

3) you can execute gift deed in favour of mother if you so desire

Ajay Sethi
Advocate, Mumbai
87911 Answers
6207 Consultations

5.0 on 5.0

1.Funds withdrawn from CGAS account shall have to be utilised within 2 months for constructing or purchasing or constructing a house. Now, how and why do you assume that you are the owner of 75% share of the flat? Has it been so mentioned in the sale deed you had registered while purchasing the flat? If not, then ordinarily, she will be treated as 50% share of the said flat and she can withdraw the said amount from her CGAS account before its date of maturity for purchasing your 50% share of the flat.You can use the said the said consideration for paying installment for the property bought by you a year back.

2. There will be no tax implication on you or herself if you gift her the sad amount or any amount.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

1. That is not possible, a gift can not be made against any consideration.

Lifting of the veil theory shall go against you, if the object of the transaction is seen which is a transaction between the family members, then you might invite some problem for you.

Would advise you to not do the same.

Consult a CA or local tax advocate.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

1. There is no legal impediment in you selling your 75% share in that property to your mother by a registered sale deed executed in her favor. You shall have to tax towards your capital gains in that. But you can use this amount to buy another house on your name to get exempted from paying capital gains tax.

2. Dont mix two subjects together and get confused.

If you want to gift any amount to your mother you can very well do it, what is this 75% share is coming in between. You are entitled to 75% share in that property and she shall be entitle to 25%.

So if you want to gift your property you can execute the same to her name by a registered gift deed.

Is there anything in particular that you want to gift her the value of 75% share in the property to her?

Whatever it is there is no gift tax for gift of money between the blood relations.

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

1) you can get benefits from selling to your mother as capital gains tax as you have purchased flat an year back. If purchasing date are clear than it will be ok to calculate exact value.

2) either you make transfer of rights from property to your mother name.

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

Hi , you can either make a sale deed or a gift deed in favour of your mother ..the stamp duty on gift is considerably less then compared to sale deed

Hemant Chaudhary
Advocate, Gurgaon
4619 Answers
67 Consultations

4.9 on 5.0

1. You are free to sell your share in your mother by executing a sale deed in her favour. However, there can be no sale without consideration. The consideration will have to be shown in the sale deed. A house that has been held for a period of at least 24 months by the owner is treated as a “long-term capital asset” and gains resulting from the sale of such a house are taxable as LTCG in the hands of the owner. In computing the LTCG, one would consider the indexed cost of acquisition of the house. An exemption can be sought under Section 54 of the Income Tax Act, 1961 (the Act) from tax if the resultant LTCG is re-invested in the purchase or construction of one residential house located in India, subject to specified conditions. This re-investment should be made within the specified time frames (i.e. within one year before or two years after the sale date where the new property is purchased or within three years from the sale date where the new property is constructed).

2. Gift the property to the mother first as the outgo would only be the stamp duty and registration charges (which too is exempted in some states between blood relatives). The question of short term capital gain for the mother does not arise as the in case of a gift, the period of holding will be reckoned including the period of holding by the donor.

Ashish Davessar
Advocate, Jaipur
30761 Answers
971 Consultations

5.0 on 5.0

1. You can bequeath by a gift deed and it will entail only minimum stamp duty and no tax implication.

2. If the source is already proved, then it will not have tax part.

Rajaganapathy Ganesan
Advocate, Chennai
2085 Answers
8 Consultations

4.9 on 5.0

Dear Client,

In jointly owned property, u r % of absolute owner vest in ur name and rest in father`s % u and mother are equal share holder 1/2 each.

U can sell your % area, subject to CGT.

GIFT deed is permissible, There is no tax on money received from Relative ,Lived in or outside India,whether NRI or NOT

There is no restriction on gifts by NRIs to resident Indians in foreign exchange or Indian rupees or in the form of assets. All sorts of gifts from relatives (as defines under Income Tax Act) are tax-free

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

You can sell the share in the property to your mother but the tax on capital gains will be accumated and accounted individually in your return. Your mother too will have legal tax liability in accordance with law.

Prashant Nayak
Advocate, Mumbai
27245 Answers
88 Consultations

4.4 on 5.0

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