We ( I, mother & sister ) engaged a builder to construct a new multi storied house by demolishing my ( father + father's own brother --- both dead long back ) house.
My cousin ( son of father's brother ) sold his 50% share of the property to the builder with our consent before the demolition of old house making the builder 50% owner of the property.
Now according to the development agreement made in 2008, the builder constructed the new multi storied house and gave possession to us of the entire 2nd floor of the building. While handing over the possession this year he made a registered gift deed for his 50% share ( the fair value of which was 36 lakhs on which stamp duty paid ) to us relinquishing his share making us absolute owner of the 2nd floor of the building and we have applied for mutation in our name to the Kolkata municipality.
We have inherited our ancestral property share. The builder having purchased the share of the cousin gifted to us his share to make us absolute owner of 2nd floor.
Our question : do we need to show the fair value of the gift ie. 36 lacs in our income in the current tax year 2017-18 and pay tax on it at our marginal rate ?
Please advise.
3 Answers
Hi,
Was the agreement done in 2008?
Who has gifted the share (2nd floor)? Is it builder?
It's bit confusing...
Related articles :
https://www.relakhs.com/ancestral-property-legal-rules/
https://www.relakhs.com/gift-income-tax-rules-detailed-guide/
https://www.relakhs.com/sale-gifted-property-capital-gains/
Yes, Agreement between builder and us was made in 2008 which was not registered.
At that time builder purchased 50% of the umnutated share of the property from my cousin, thus he became 50% owner and we became 50% owner of the property.
It was mentioned in the agreement that we as original owner will get entire 2nd floor upon completion of new building.
As 50% of unmutated share of 2nd floor of the builder is icluded in 2nd floor, he transferred his share through registered gift deed to us for making us absolute owner. The fair value of the builder's share transferred through registered gift deed waS 36 lacs on the day of registration.
Question is whether we have to pay tax on 36 lakhs ( gift value ) transferred through gift deed in FY 2017-18
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Yes, Agreement between builder and us was made in 2008 which was not registered.
At that time builder purchased 50% of the umnutated share of the property from my cousin, thus he became 50% owner and we became 50% owner of the property.
It was mentioned in the agreement that we as original owner will get entire 2nd floor upon completion of new building.
As 50% of unmutated share of 2nd floor of the builder is icluded in 2nd floor, he transferred his share through registered gift deed to us for making us absolute owner. The fair value of the builder’s share transferred through registered gift deed waS 36 lacs on the day of registration.
Question is whether we have to pay tax on 36 lakhs ( gift value ) transferred through gift deed in FY 2017-18