Recently a Reader has asked me a question - “My mother has left a will, giving an equal shares to her four children – 2 daughters and 2 sons – in a residential flat. While both my sisters have transferred their rights in favour of their brothers by way of release deed, my favour by taking Rs.22 Lakh (i.e. 50% of the flat’s market value). Is the money received by my brother taxable as Capital Gain? Are my Sisters liable to pay any tax?”
Any transfer of a capital asset under a gift or will is not regarded as a transfer and accordingly not liable to capital gains tax.
Therefore, when the property was transferred under a WILL, to the 4 children and also when the 2 sisters transferred it as a gift to the brothers, these transactions should not be subject to Capital Gains tax. However, the matter is not free from debate. Therefore, the actual facts of the transaction in respect of the family arrangement need to be examined in detail.
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