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Tax implications of sale of property and transfer to Daughters
07-Feb-2023 (In Property Law)
I am the original allottee of a DDA Flat in a Co-operative Group Housing Society in Dwarka, Delhi. This Flat was allotted to me in the year 2002 not converted into Freehold. Hypothetically if I sell this flat may fetch a price of around one crore rupees. I have two married daughters, to whom I want to give out the i/3 of the proceeds to each and keep balance 1/3 rd with me. Both my daughters are in the process of buying their own flats in due course and this amount will be useful to them for their purchase as they are living in different cities. I want to know the best option keeping in view taxation issues should I sell the property first and transfer the proceeds to my daughters or should I transfer the flat in the name of my daughters and thereafter they can sell at appropriate time when they need the money to pay for their own purchase Can I convert this this flat into 'Freehold' property in their names Regards, Rajagopalan, 09868169984
First you will have to apply for conversion of leasehold to freehold in Delhi Development Authority, after getting it transferred. I will suggest you to first convert the flat into a freehold property only then you will be eligible to transfer the said property. Now you can do either of them, however, it will be best to keep the flat as for now and transfer it in their name, 1/3rd share for each of you. Then, after that you can sell it whenever you are in need of money.
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Adv. Siddhant Sharma
Delhi | 500+ Answers
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What is your prerogative whether you want to give your daughters share in property or you can give them concerned amount after alienating your property well one thing I would like to tell you when you will handover them money then you should mention that amount in your income tax return....
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Adv. Siddharth Dev
Delhi | 200+ Answers
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that really depends on whether you want to live in the flat or not. if not, then transfer it by way of gift to your two daughters. the other thing you need to keep in mind is if you sell the flat, then you need to reinvest the sale proceeds into property itself to avoid capital gains tax. you cannot convert the property to freehold in their names as you are currently the owner. once the property is transferred by way of gift, they can then have the freehold issued in their respective names.
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Adv. Angad Mehta
Delhi | 100+ Answers
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