Q. Gift Deed Vs Relinquishment Deed. Difference and Capital Gains Tax implication.

1,886 views
Question added Mar 12, 2018 Income Tax By Sushil Kumar Jain, CA in Practice, Delhi
A residential flat is co-owned by husband & wife. At the time of acquisition, wife paid 99% of the cost. Flat was acquired 5 years ago.

Now, wife relinquishes all her rights in flat in favour of husband through registered relinquishment deed. Is there any LTCG implication for wife? Whether it shall make a difference if instead of relinquishment deed, a registered gift deed is executed by wife in favour of husband?

1 Answer

+1 like
answered Mar 12, 2018 By CA PRAMOD JAIN, CA, CS, CMA, LL.B, Delhi
edited Mar 12, 2018 CA PRAMOD JAIN, CA, CS, CMA, LL.B, Delhi
Very good question... with specific reference to transaction between spouses..

Relinquishment is a transfer u/s 2(47)(i) resulting in capital gain... and gift is not a transfer u/s 47(iii)

Hence where the property rights were relinquished.. there is a transfer... the consideration of which is not ascertainable.. S. 50D comes into play along with s. 50C for relinquisher and 56(2)(x) for acquirer..

Had it been a gift the wife would be covered by 47(iii)... no capital gain and husband would come into the exceptions covered u/s 56(2)(x)

Also in case of gift keeping mind the clubbing provisions u/s 64... whenever husband sells it later... the gain would be taxed in hands of wife only

Concept by CA Pramod Jain

Experts Panelist

  • CA Virander Kumar Chauhan Goods and Services Tax (GST) Answers Posted : 9148
  • CA PRAMOD JAIN Audit and Accounting Standards, Corporate Matters/LLP, Goods and Services Tax (GST), Income Tax, Ind AS, Insolvency and Bankruptcy Code, RBI / FEMA, SEBI, International Taxation , Transfer Pricing, Benami Property Law, Bank / Insurance / Stock / Debtors Audit, Internal Audit, Code of Ethics, ICAI, Miscellaneous, Investment & Finance, Valuations Answers Posted : 8592
  • CA Raman Khatuwala Goods and Services Tax (GST) Answers Posted : 3808
  • CS Divesh Goyal Corporate Matters/LLP, Insolvency and Bankruptcy Code Answers Posted : 1815
  • CA Prakhar Bansal Audit and Accounting Standards, Corporate Matters/LLP, Goods and Services Tax (GST), Income Tax, Bank / Insurance / Stock / Debtors Audit, Code of Ethics Answers Posted : 1424
  • CA MANOJ PAHWA Goods and Services Tax (GST), Income Tax, Insolvency and Bankruptcy Code, RBI / FEMA, International Taxation , Transfer Pricing, Benami Property Law, Bank / Insurance / Stock / Debtors Audit, Miscellaneous Answers Posted : 1296
  • CA CA. RAJESH KUMAR KHANDELWAL Goods and Services Tax (GST), Income Tax, Bank / Insurance / Stock / Debtors Audit, Valuations Answers Posted : 1210
  • CA PRAVEEN SHARMA Audit and Accounting Standards, Corporate Matters/LLP, Goods and Services Tax (GST), Income Tax, Insolvency and Bankruptcy Code, Benami Property Law, Code of Ethics, ICAI, Investment & Finance Answers Posted : 1035
  • CA ASHU GARG Goods and Services Tax (GST) Answers Posted : 959
  • CA Rajesh Saluja Goods and Services Tax (GST) Answers Posted : 823
  • View more

29,936 questions

35,979 answers

123 experts

9,627 querist

...