Dear All,
A property is under the joint holding of my bhabhi and her sons.
If they gift this property to me, will it become taxable?
If yes, on what amount what the tax have to be paid? What are the remedies to reduce the tax burden?
Rajesh (properitor) 26 March 2010
Dear All,
A property is under the joint holding of my bhabhi and her sons.
If they gift this property to me, will it become taxable?
If yes, on what amount what the tax have to be paid? What are the remedies to reduce the tax burden?
Vineet (Director) 27 March 2010
The market value of share of your nephews in property shall be treated as income from other sources in your hand as they are not Relatives as defined in section 56 of income tax act. The gift from Bhabhi is exempt from any tax.
The tax shall be as per applicable slab in which your net taxable income including the above gift amount falls.
To lower the tax cost it is advisable that first all the sons gift their share to mother i.e. your bhabhi and then your bhabi gifts the entire property to you. There will be incidence of additional stamp duty and registration charges depending upon your state but the same will be minimal in comparison to income tax liability.
Rajesh (properitor) 28 March 2010
Dear Vineetji,
Thank you so much for your reply.
I would just like to confirm if the tax is attracted on the market value? Is the tax applied on the Jantri or the value declared in the gift deed?
Would a gift deed be the right way to transfer the share of nephews to my bhabhi?
Vineet (Director) 30 March 2010
Tax is applicable on market value of the property as on date of gift.
Yes, to transfer title from nephew to your Bhabhi, gift is the ideal tax efficient way. As stated earlier, please check stamp duty incidence which will be calculated on the market value and varies from state to state.
Vineet (Director) 01 April 2010
Rajesh (properitor) 18 April 2010
A POA is executed in my favour by my nephews and bhabhi for the said property.
It is a general POA allowing sale, gifting of the property.
Can this POA be used to execute a gift deed in favour of my bhabhi on behalf of the nephews?
Rajesh (properitor) 18 April 2010
Or would it be better to execute a Settlement/Release deed in favour of bhabhi on behalf of the nephews?
Settlement/release deed to avoid the high Stamp duty applicable on the gift deed.
The state is Gujarat.
Rajesh (properitor) 18 April 2010
What are the tax implications on nephews and bhabhi if a settlement/release deed is done?
Nephews and bhabhi have become the owners of the property after the death of my brother.
It was a self-acquired property by my brother.
Rajesh (properitor) 18 April 2010
Will my bhabhi be required to be present at the registrars office when a gift or a settlement deed is done?
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