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Tejas Chokshi | Answer |Ask -Follow

Tax Expert - Answered on Apr 25, 2023

CA Tejas Chokshi has over 20 years of experience in financial planning, income tax planning, strategic and risk advisory, banking and financial products and accounting and auditing.
He is an information system auditor, a forensic auditor and concurrent bank auditor.
Chokshi, who has a master’s degree in management, audit and accounting from Gujarat University, has completed his CA from the Institute of Chartered Accountants of India.... more

Asked by Anonymous - Mar 28, 2023Hindi

Part-I 1. My Father was a central govt pensioner, died in 2020 2. My Mother died in 1990( first wife to my father) 3. Father got married again – who was a divorcee(second wife) with 3 children at the time of marriage with my father 4. After my father’s death, second wife left us, as she was getting my family pension as nominee 5. My maternal grand father gifted a plot at the time of her marriage( first wife) with my father 6. My father build a house on the plot g+1( it is in commercial area- front is shop and back house and in 1st floor same pattern) – schedule property-1 Part II 1. We are 4 children to our parents( 1 and 2) 2. 3 female and 1 male( myself) 3. My eldest sister died in 2005 leaving 1 male child and her husband behind 4. My 2nd elder sister married but no kids 5. 3rd elder sister married having 2 children 1-male and-1-female 6. I am also married having 2 children both are male 7. Both my sisters are working and husbands also working 8. Myself running a shop and staying with family in schedule property-1 9. My father purchase a plot in my name in 2015 schedule property -2 Part-iii 10. My both sisters asking share in schedule property-1 after my father’s death 11. I suggested them, I will give the schedule property-2 as a gift but that time they did not accepted Now 12. One of my sister called me, asked to sell the schedule property-2 and pay the amount as a share amount of schedule property-1. 13. I am ready to do that, in future also its their right to get the share from schedule property-1 Question How can I handle the issue If I sell the schedule property -2, will I have to pay the tax to the government Can I gift the schedule property -2 to my sisters how can i transfer the schedule property-1 on my name Please Suggest all option in dealing this case and also if any legal problems persists after selling the schedule property-2

Ans: Dealing with family property issues can be complicated, and it's essential to understand the legal and tax implications before making any decisions. Here are some options you can consider:

Sell Schedule Property-2: If you decide to sell the Schedule Property-2 to pay your sisters' share in Schedule Property-1, you may have to pay capital gains tax on the profit earned from the sale. However, you can claim an exemption from capital gains tax by investing the sale proceeds in specified assets, such as residential property or bonds, within a certain period. It's best to consult a tax expert to understand the tax implications and explore the available options.

Gift Schedule Property-2: You can gift the Schedule Property-2 to your sisters, but it may attract gift tax. However, you can also consider transferring it as a family settlement, which is a legal agreement between family members that divides assets and liabilities in a fair and mutually agreeable manner. It's advisable to consult a lawyer to draft a family settlement deed and ensure that all legal formalities are completed.

Transfer Schedule Property-1: If you want to transfer the Schedule Property-1 on your name, you need to execute a gift deed or a sale deed, depending on whether you want to transfer it as a gift or sell it to yourself. However, if there are other legal heirs or claimants to the property, such as your sisters, they may contest the transfer, and you may have to go through legal proceedings to establish your ownership rights.

Mediation: If you and your sisters cannot agree on a solution, you can consider mediation, which is a voluntary process where a neutral third party helps you reach a mutually agreeable solution. Mediation can save time and money compared to going to court, and it allows you to maintain family relationships.

In summary, before making any decisions, it's best to consult a tax expert and a lawyer to understand the legal and tax implications and explore all available options. Additionally, it's essential to communicate openly and honestly with your sisters and try to find a solution that is fair and mutually agreeable.

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