Stamp responsibility payable on the switch of property depends upon legal guidelines of the state

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My father desires to switch a property he owns to my title. What’s the process for doing this? Will I’ve to pay stamp responsibility or registration charges for this switch? What would be the tax implication?

—Identify withheld on request

It’s assumed that the property could be transferred by your father to you for nil or insufficient consideration. Any such switch shall be thought-about a present transaction from an earnings tax perspective. Because the present is obtained by you from a specified relative, the transaction of present itself is not going to set off any earnings tax implications for you or your father.

Usually, present of an immovable property must be effected by a registered present deed, together with fee of relevant stamp responsibility, relying on the legal guidelines of the state during which the property is situated. You need to search authorized opinion concerning the applicable documentation and stamp responsibility implications.

My father purchased 2 acres of land in 1960 for 2 lakh. Upon his demise, my mom inherited it. In 1998, she divided the property and I now personal 0.5 acre of the land. I now wish to promote 0.2 acre of my share for 50 lakh. What shall be my tax legal responsibility for this?

—Identify withheld on request

Because the land has been held for greater than 24 months previous to the sale, the positive factors arising from it might be taxable as long-term capital positive factors (LTCG) in your palms.

LTCG could be computed because the distinction between internet sale proceeds and the listed value of acquisition.

Because the land was acquired previous to 1 April 2001, its precise value will be substituted with the honest market worth (FMV) of the land as on 1 April 2001. You need to acquire a valuation of the asset on the stated date and use both the FMV or the precise buy value at your discretion.

In Price range 2020, it has been proposed that efficient FY21, the FMV can not exceed the stamp responsibility worth as on 1 April 2001. However the proposal is but to be permitted.

The listed value of acquisition of the land could be calculated as: value of acquisition or FMV as on 1 April 2001/value inflation index (CII) of FY 02 (i.e. 100) x CII of 12 months of sale. Tax is payable at 20% on the ensuing LTCG.

A roll-over exemption could also be out there to you for the next investments: Beneath Part 54EC of the Revenue-tax Act, by investing LTCG in specified notified bonds; underneath Part 54F, by investing the web consideration in a brand new residential home in India; or if the land is a residential property, underneath Part 54GB of the Act, by investing the web consideration in fairness shares of an eligible startup.

Parizad Sirwalla is accomplice and head, world mobility companies, tax, KPMG in India

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