How is sale of property by a dad or mum taxed?

My father is trying to promote some land that has been in his possession for greater than 8 years for round ₹22 lakh. Does he have to pay long-term capital features (LTCG) tax? Can he ship me the proceeds as a present in order that I can purchase a home in subsequent one month?

—Name withheld on request

We assume that the land held by your father, is just not an agricultural land and that you just qualify as a significant for tax functions. As the land held by your father is a long-term capital asset (since held for greater than 24 months), any features arising from switch of the identical shall be taxable in your father’s arms as (LTCG.

As per the Income-tax Act, a deduction could be claimed in opposition to the LTCG arising from sale of such land, as prescribed, in case the online gross sales consideration is reinvested by the assessee for buy of residential home property (new asset) in India throughout the prescribed deadlines and topic to achievement of different specified circumstances. A deduction in opposition to the LTCG might also be claimed by investing into specified property reminiscent of bonds, topic to prescribed circumstances and limits.

To declare deduction from LTCG, the re-investment of web gross sales consideration is required to be carried out by the proprietor of the unique asset. Hence, your father might be eligible for this deduction provided that the online gross sales consideration is reinvested by him in a residential home. In case your father items the sale proceeds from the land to you rather than reinvesting it himself, the above deduction is probably not out there to him. There are few judicial precedents which help that it isn’t necessary that such reinvestment in new asset must be within the title of unique proprietor just for the aim of this deduction, nonetheless the identical is just not free from doubt. Do notice that any reward of cash or property by a father is just not taxable within the arms of the recipient.

My spouse labored for a corporation for precisely 4 years and 10 months. Is she eligible for gratuity? How can she show her declare?

—Rohan

We perceive that your spouse has been working with an organization/institution (not being a seasonal institution) to which The Payment of Gratuity Act , 1972, (POGA) is relevant.

Gratuity is payable to an worker upon termination of employment (on superannuation/ retirement/ resignation and so on.), after rendering steady service for not lower than 5 years (besides in case of loss of life or disablement, the place this situation doesn’t apply).

Further, the place an worker is just not in steady service for any interval of 1 yr, then such worker shall be deemed to be in steady service for such interval if the worker has, within the previous 12 months interval, truly labored underneath the stated employer for:

1. A interval of 190 days, if the institution works for five days or much less in every week;

2. A interval of 240 days or extra, in some other case

Since your spouse has labored for her employer for a steady interval of 4 years 10 months (i.e. greater than 4 years and 240 days), she must be eligible for gratuity.

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

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