Gift of capital property to spouse is not taxable

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Thus, if it is a question of transferring the ownership of the apartment to your wife so that she becomes 100% owner of the said apartment, you can consider giving her your share without any consideration.

By Chirag Nangia

– My wife and I jointly own an apartment in Mumbai. The EMI is paid by me. My wife received part of the proceeds from the sale of an apartment she purchased. I want to sell the apartment in Mumbai to him at market price by paying the registration and stamp duty. Can I sell an apartment to a woman who is also a co-owner of the property?
– Alok Sheopurkar
Your wife owns the apartment 50/50, but she paid nothing for her purchase. Now you want to sell your share of the apartment to your wife at market price. Any disposal of fixed assets results in a taxable capital gain. However, the gift of capital property to the spouse is not taxable. Thus, if it is a question of transferring the ownership of the apartment to your wife so that she becomes 100% owner of the said apartment, you can consider giving her your share without any consideration. The taxation of the donation remains exempt from tax, whether or not it financed the purchase of the apartment.

– If a person starts a real estate business with capital of 5-10 lakh and has no other source of income, will it be considered as business income and charged as profit and gain from companies and the profession (PGBP) or imputed under the capital gain? Also, will this be covered by Micro, Small and Medium Enterprises (MSMEs)?
—Ajaz Khan

The individual starts a business as an owner, without forming a legal entity i.e. a corporation or an LLP. In addition, the real estate purchased is for the sole purpose of resale. Thus, it is obvious that the individual must be engaged in the business of real estate trading. Therefore, the provisions of the PGBP will apply. MSME benefits can be claimed by owners, but only if the business is registered as an MSME.

– My brother works with a shipping company in Singapore. He stays in India for about 100 days. Will he be exempt from paying taxes in India?
—Dolly Moga

If he is an Indian citizen working abroad or a crew member on an Indian vessel, then he is considered an Indian resident if he stays in India for more than 182 days during this exercise. Non-resident Indians are liable to tax in India only on income derived from India (i.e. income received, accrued or generated in India or deemed to be received, accrued or generated in India ). However, income received and earned outside India is not taxable in India.

The author is Principal, Nangia Advisors LLP. Send your questions to [email protected]

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