We are hindu undivided family. My father is no more (died in 2001) and my mother (aged 85) is with us. My mother is a family pensioner, but well below the tax limit.
We are two brothers, no sisters.
My elder brother aged 70 yrs is a retired person with very meager pension, and does not come under tax per view. He got one daughter, married. House wife.
I am a pensioner and I am a tax payer. I have two sons, both are employed and tax payers.
Now, Our property (undivided) are :-
1) 100 yrs old house built by my grandfather, construction cost unknown. As per present Market value it may fetch us Rs. 84 L.
This sum should be shared by brother and me.
2). A house plot purchased by our father in 1969 at a total cost of Rs.2000/-. As per The market value it may fetch us Rs. 26 L.
This sum will be devided by me and brother.
My entire share of the above two transactions (Rs.42 L + Rs.13 L=55 L). Of this sum I wish to give Rs.25L each to my sons and take only remaining Rs. 5 L, accordingly ask the buyer to put it in their bank accounts?
My elder son who is abroad does not want to invest in property here and hence wants to pay tax for his share. Is it possible. If so, what's the rate of capital gains tax.
By younger boy wants to buy a house with the amount.
If we wish to share some amount to our mother, whether it attracts any tax?
Please educate us on tax implications on the sale of these properties. How to avoid or minimise captal gain tax.
3 Answers
Hi,
If you intend to sell these two properties, the prospective buyer(s) may hesitate to deposit the mentioned amounts in your Sons' bank accounts. Instead, they may give the sale proceeds to your accounts (self & your brother).
If both of you receive the amount then Long term capital gains taxes are applicable on both transactions.
The current tax rate is @ 20% (with indexation).
One option is, you can buy a new residential property (for one of your son) in your name with a portion of the sale proceeds and can escape from long term capital gain tax. (Section 54).
The remaining portion on which you can pay LTCG taxes and gift the amount to your second son and mother. These can be considered as Gifts, hence no tax is applicable on gift transactions.
Kindly read :
https://www.relakhs.com/how-to-save-capital-gains-tax-on-sale-of-land-house-property/
https://www.relakhs.com/sale-gifted-property-capital-gains/
https://www.relakhs.com/gift-income-tax-rules-detailed-guide/
Thank you.
The buyer is prepared to deposit the money in my son account, as apportioned by me. In that case can I go ahead.
Regards,
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