A residential open plot was self acquired by my elder brother in 1979. Ground floor was constructed in 1982 and first floor in 1998. On the demise of my elder brother, my bhabhi and her two sons inherited the property through succession. The three owners jointly gifted said property by a registered gift deed without consideration to me and wife in 2013. How will capital gain be calculated?
—Anurag Kumar Singh
We have provided the answer below assuming that the plot was purchased by your elder brother. In case of the property acquired before 1 April 2001, the cost of acquisition of the property shall be the fair market value of the property as on 1st April 2001 and the cost of improvement incurred thereafter. Thus, to ascertain the cost of acquisition, you shall get the property valued from a registered valuer and increase such value with the cost of improvement to compute the capital gains in your hands. As per the Income Tax Act, no tax is required to be paid on the gifts if it is received by a relative. Thus, you shall not be required to pay tax on this gift deed.
Me and my wife had bought flat for Rs 19 lakh jointly. My wife’s contribution was around Rs 4 lakh and a home loan was availed for the rest of the amount on my name. Accordingly the rental income is also shared between us for the income tax calculation. Now we are planning to repay the part of the loan amount from my wife’s income. Can the rental income share be divided accordingly?
Income from a house property jointly held by one or more persons is required to be taxed in the ratio of their respective share in the property. Thus, the income from the property jointly held by you and your wife, shall be taxed in the ratio of the revised contribution.
My son received Rs 51000 as demand draft from his maternal grandfather on his birthday. Will that amount be considered taxable? What I am aware is that gift from relatives defined in section 56 is excepted but not anywhere described maternal grand parents as relative.
The definition of relative in the Income Tax Act does not provide any specific restriction on inclusion of maternal grandparents as lineal ascendants. Thus, maternal grandfather would be covered in the definition of the relative and gifts received from him will be exempt from tax.
The writer is director, Nangia Advisors LLP. Send your queries to fepersonal email@example.com