My Mother (homemaker) bought a property (Land) in Bhopal in 2019 and it is registered under her name. Now, I want to add my name (being a daughter ) in this registered sale deed. How to do and what expenses will I incur? Further, the reason for adding the name in the above-mentioned deed is that I have a short term Capital gain and I want to utilize the sales proceed to construct the house on the above land which is in my mother name and get the Home loan on it. Request you to please advice how to save the Taxes (short term capital gain) and how can i apply or to take a home loan from a bank in such type of case.
See in the said property as it is registered in mother's name and she has paid the sale proceeds now your name cannot be registered in same or you cannot get exemption in same.
You cannot save the short term capital can in respect of property though you can get deduction as mentioned under section 80C to 80 u of income tax act.
your mother can execute sale deed for 50 per cent share in property in your name
2) sale deed should be duly stamped and registered
3) then you can carry on construction on said land and avail bank loan
4) short Term Capital Gain on property is considered as a gain from selling a property which was held by you for less than 36 months. As a taxpayer, you are liable to pay tax on short term capital gain on property as per your applicable marginal income tax slab.
1. Your mother can gift 50% undivided share in the property or any percentage of share to you, by a registered Gift Deed and if you accept the gift, you will become joint owner of the property.
2. In this way, your name can be added as a joint owner of the property alongwith your mother.
3. By getting the gift deed executed, you can utilise the proceeds and construct a home by availing housing loan.
4. Since your mother is gifting you some share of the undivided property, and that is within blood relatives, the stamp duty will be nominal. The stamp duty varies from state to state.
Dear Client,
To your horror, no exemption or savings is allowed on short term capital gain tax u/s 54 i.e. by re-investment in property or buying capital gains bond issued by REC or NHAI.
And to become co owner in mother`s property she will have to execute gift deed of half portion in your name. 4% stamp duty payable.
if you have incurred short term capital gains then you cannot save the tax on it by investing in construction of a house
that benefit is applicable only when the individual incurs long term capital gains
so no purpose will be served if your name is added to the title document standing in sole name of your mother
however if you do wish to add your name in title document, then the seller will have to be approached to execute sign and register a supplementary agreement to the principal document
this supplementary agreement will be signed by seller and you and your mother whereby you will be joined as a co-purchaser (even though full money would have been paid by your mother)
1) You can add your name in the property as a partner or as relinquish deed or purchasing share from your mother.
2) Short term gain is calculated when you're selling the property or if you have sold any immovable property which was on your name and than you can purchase new property as per Index ratio you can be exempted from short term or long-term gains.
1)your mother cannot add your name in registered sale deed
2) she can execute gift deed in favour of daughter for 50 per cent share in property
3) have it duly stamped and registered
4) property will reflect name of both co owners
what if all facts and scenario are the same but I have a long term capital gain from immovable property.
if you have long term capital gains you can reinvest sale proceeds in purchasing share in mother property carry on construction to avail benefit of long term capital gains
Then you can purchase part of land from mother or some other property for exemption under section 54 income tax act.
To save long term capital gain, many options available. The new residential property must be purchased either 1 year before the sale or 2 years after the sale of the property/asset. Or the new residential house property must be constructed within 3 years of sale of the property/asset.
Mother will gift you the land and than construction on it.
Can also invest in govt. bonds.
There is no provision of law to add the name in the registered sale deed.
If you want to have capital tax gains exemption then you have to purchase a portion of the property from your mother by a registered sale deed.
She can sell an extent of undivided share of property to you by which you both shall be joint owners of the property.
Alternately she can execute a registered gift deed to you for a share in the property but you cannot claim capital gains tax exemption by this mode, however you can remain as a joint owner along with your mother to the same property.
For want to claim exemption from paying long term capital gains tax you have to purchase a property out of the capital gains amount.