Dear Pankaj Ji,
My father had purchsed a residential house @ 46000/- in 1961. After his death my mother wishes to sell the property in 1.5 Cr and give .5 cr each to her unmarried daughter and two grandsons, so that they can purchase residential or agricultural properties of their own choice. What will be LTCG and gift tax provisions and how to save them.
Long term capital gain would arise from sale of house and owner would be liable to pay income tax on it.
If your mother sells the house and does not buy another residential house property on her name, she would need to pay income tax before transferring amount to her daughter and grandsons.
If would be better if your mother transfer property through a settlement deed to daughter and grandsons. Then property should be sold, this would make daughter and grandsons liable for income tax on their share of long term gains. Then if they buy/construct residential house property in their name, income tax can be saved u/s 54.
