Gifting property both ways
HP
(Querist) 25 January 2018
This query is : Open
Hi, my brother and I live in different towns. We have properties that we inherited but I got a property in his town and he in mine.
We want to gift each other these properties so we can manage them respectively as it's a headache for us correctly.
I understand under the gift tax blood relatives can gift each other properties. Would this be a problem for us, some CA's have said not an issue since we are blood relatives while others are saying it will attract penalties.
Any advice?
Adv Shailendra Deshpande
(Expert) 26 January 2018
You can gift immovable property to each other. In that case, both of you need to pay Govt. registration charges for transfer as per State/Town norms. For e.g. In Maharashtra State (If I am not mistaken) 6% of property value is paid for registration.
Dr J C Vashista
(Expert) 27 January 2018
@ HP,
You are an anonymous author, who is not entertained on this platform.
However, registration of gift or any other deed/ document is a State subject accordingly charges differ from state to state, for which you should consult local lawyer(s).
HP
(Querist) 28 January 2018
Interestingly we have spoken to multiple local lawyers and CA's and each one has a different opinion. Some say it's perfectly fine since its blood relatives (just pay registration charges etc). Others say it's tax evasion and ITO will harass you.
So I'm trying to get an opinion from experts who may have handled such a situation in real life.
Guest
(Expert) 28 January 2018
Interestingly, your pretension speaking to multiple lawyers seems to be quite a lame excuse to falsely convince the authors about a hypothetical problem to be a real one, so that nobody can judge whether yours is a property related academic problem or taxation related academic problem. I have a strong opinion that this is not a real problem, but you wanted to seek answer merely to an academic problem, when both the brothers wanted to exchange respective properties as gifts.
If there is some real problem that you are facing, better visit some tax lawyer, if the problem relates to taxation, otherwise to some property laws expert, if the problem relates to disposal of your property.
Guest
(Expert) 28 January 2018
Seemingly, unbelievable story!
By the way, any background of having developed property by both the brothers in different cities of each other?
Also, what is the measurement of each of yours properties and what is the circle rate of properties in each city?
DR.VEDULA GOPINATH
(Expert) 29 January 2018
can be done by exchange gift deed . pl give details dr vedula gopinath vgnath@gmail.com
HP
(Querist) 31 January 2018
They were inherited properties (read the first post). Fate has it such that we were bequeathed properties in opposite towns. Such as it is now we're trying to figure out if we can untangle this by gifting it to each other or if we have to sell it to each other? The circle rates are very different, about a 50% difference so I would like to gift my brother a cash component about the difference in the circle rates so I'm not taking advantage of the situation. I can't seem to get a clear answer as some seem to think it would be considered tax evasion while others say just register the deed and it should not have an issue. Of the four lawyers / CA's we have spoken with its early split! Two said sell it to avoid tax evasion charges while two said it's perfectly legal as long as your register the deed.
Is there anyone who has actually dealt with a situation like this (theory apart)?
