Capital gains property

Dear Client,
If the property is sold before 24 months from the date of acquisition, the gain on such transfer is termed as a short-term capital gain. Budget 2024 has proposed the following amendments effective from FY 2024-25 in respect of capital gains. A property held for less than 24 months is considered Short-Term and property held for short term shall continue to attract tax at slab rates. If total taxable income (excluding short-term capital gains) stays within Rs.2,50,000 for resident individuals below 60 years, HUF, and NRI, then unutilized exemption can be adjusted against short-term capital gain. Short-term capital gains (STCG) are taxable regardless of the amount of gain. Unlike long-term capital gains (LTCG), which have an exemption limit of Rs 1.25 lakh per year, there is no exemption limit for STCG. Income Tax is a branch of law or legislation, that eventually comes under the arena of Chartered Accountants and Tax Consultants who have expertise and in-depth knowledge on the subject and may guide you properly to understand the tax implication on STCG.

Dear Sir,

Property Transfer to You (Legal Heir) in Feb 2024:

This transfer is considered an inheritance. In India, receiving property through inheritance (under a will or by way of succession) is not a taxable event in itself. There is no inheritance tax levied on the recipient at the time of inheriting the asset.

3. Property Transfer from You to Your Wife in March 2024:

This transfer can be considered a gift. Gifts received from "relatives" as defined under the Income Tax Act, 1961, are exempt from income tax for the recipient, regardless of their value. Your wife, being your spouse, falls under the definition of a "relative." Therefore, your wife receiving the flat from you as a gift in March 2024 does not attract any tax liability at that point.

4. Selling the Property Now (by your wife) and Buying a New Property:

This is where capital gains tax comes into play. When an inherited or gifted property is subsequently sold, capital gains tax is applicable on the profit earned from the sale.


Your wife, as the seller, can claim exemption under Section 54 of the Income Tax Act if she reinvests the capital gains (or a portion thereof) into purchasing or constructing a new residential house in India.