How Can I Transfer My Father-in-Law's Property to My Wife? (Tax Implications?)

Ans: There are a few options you could consider for transferring your flat to your daughter , without affecting your current ownership or enjoyment of the property.

One option is to create a joint tenancy with your daughter. This would mean, your share of the property automatically transfers to your daughter without the need for probate or a will. However, you would need to be sure that you want to give up control over your share of the property during your lifetime.

Another option is to create a life estate, which allows you to continue living in the property during your lifetime while giving your daughter the right to inherit the property after you both pass away. This would allow you to retain control over your share of the property during your lifetime and provide for your daughter's future inheritance.

You could also consider creating a trust to hold the property for your daughter's benefit. This would allow you to continue living in the property during your lifetime while ensuring that it passes to your daughter after your death according to the terms of the trust.

These are the personal views basis your question.

Ans: 01. In absence of information, I suppose the property being sold is a Long Term Capital asset.
02. Please work out Cost of ancestral property, so that you can work out Capital Gain on it, after reducing the same from sale amount of Rs.29.00 lakhs.
03. LTCG will be taxed @12.50% with Indexation or @20.00% with Indexation. You can choose the option, where the LTCG is less.
04. Your father can Gift the amount to both sons without any tax implications. The Gift should be by cheque or online transfer and not in cash. Better if proper document for gift is prepared.
05. Both sons may use the gifted money in the way they like, including re-payment of loans, either housing or other loan.
Most welcome for any further clarifications. Thanks.

Ans: Besides Gift, he can transfer his property to his daughter, through transfer/sale deed. In many states like Punjab, property can be transferred within family, without payment of any Registration fee.
Income Tax is not involved in such transactions.
Most welcome for any further clarifications. Thanks.

Ans: Please confirm, whether your wife is a member of HUF, from where property is to be gifted or not ?
Most welcome for any further clarifications. Thanks.