3rd SERIES OF FAQs ON GIFT RECEIVED BY ON INDIVIDUAL OR HUF

Q. 9 Are there any cases in which the value of immovable property received by an individual or HUF without consideration (i.e. by way of gift) is not charged to tax?|Are gifts of immovable property received by an individual or HUF charged to tax?

Stamp duty of immovable property is chargeable to tax, if immovable property is received by an Individual or HUF without any consideration and the stamp duty value exceeds Rs. 50000.

However, in the following cases nothing will be charged to tax in respect of immovable property received on or after 01/10/2009 without any consideration, even if the stamp duty value exceeds Rs. 50,000:

• from any relative or by a HUF from its members; or
• on the occasion of the marriage of the individual; or
• under a will/ by way of inheritance; or
• in contemplation of death of the payer or donor as the case may be; or
• from a local authority as defined under?Explanation to clause (20) of?section 10 ?of the Income-tax Act, 1961; or
• from any fund, foundation, university, other educational institution, hospital or other medical institution, any trust or institution referred to in??section 10(23C) ; or
• by any fund, trust, institution, any university, other educational institution, any hospital, other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or?(applicable if the property is received on or after 1st?day of April, 2017)
• from a trust or institution registered under??section 12AA ?; or
• from a trust or institution registered under section 12A; or?(applicable if the property is received on or after 1st?day of April, 2017)
• by way of transaction not regarded as transfer:??(applicable if the property is received on or after 1st?day of April, 2017)

1. property received by way of distribution at the time of total or partial partition of HUF [sec. 47(i)]??
2. property received by an Indian subsidiary company, if the parent company or its nominees hold the whole of the share capital of the subsidiary company [sec. 47(iv)]??(Inserted by Finance Act, 2018 i.e. w.e.f 01.04.2018)
3. property received by an Indian holding company, if the whole of the share capital of the subsidiary company is held by the holding company [sec. 47(v)]?(Inserted by Finance Act, 2018 i.e. w.e.f 01.04.2018)
4. property received by amalgamated company from amalgamating company in the scheme of amalgamation, if amalgamated company is an Indian company. [sec. 47(vi)]
5. property received by resulting company from demerged company in the scheme of demerger, if resulting company is an Indian company. [sec. 47(vib)]
6. property received by a banking institution from banking company in a scheme of amalgamation of a banking company with a banking institution sanctioned and brought into force by the Central Government under sub-section (7) of section 45 of the Banking Regulation Act, 1949 (10 of 1949)?[sec. 47(viaa)]
7. property received by successor co-operative bank from predecessor co-operative bank in a business reorganisation.?[sec. 47(vica)]
8. from an Individual by a trust created or established solely for the benefit of relative of the Individual.?(applicable if the property is received on or after 1st?day of April, 2017)

?Q. 10 An individual received gift of three properties from his friend. The value of none of the property exceeded Rs. 50,000, but the aggregate value of these three properties exceeded Rs. 50,000. What will be the tax treatment of gift in this case?

In case of immovable property received without consideration by an individual or HUF, the limit of Rs. 50,000 is to be applied transaction-wise and all immovable properties received as gift during the year are not to be clubbed for applying the limit of Rs. 50,000. Hence, if the total stamp value of immovable properties received as gift during the year exceeds Rs. 50,000 but the stamp value of none of the property exceeds Rs. 50,000, then nothing will be charged to tax.

?Q. 11 Are immovable properties received as gift from friends liable to tax?

Gifts received from relatives are not charged to tax. Relative for this purpose means:

(a) Spouse of the individual;

(b) Brother or sister of the individual;

(c) Brother or sister of the spouse of the individual;

(d) Brother or sister of either of the parents of the individual;

(e) Any lineal ascendant or descendant of the individual;

(f) Any lineal ascendant or descendent of the spouse of the individual;

(g)?Spouse of the persons referred to in (b) to (f).

Friend is not a relative as defined in the above list and hence, gift received from friends will be charged to tax (if other criteria of taxing gift are satisfied).

?Q. 12 Are gifts of immovable property located abroad liable to tax?

If the aggregate value of monetary gift received during the year by an individual or HUF exceeds Rs. 50,000 and the gifts are not covered under the exceptions prescribed in the preceding FAQ, then gifts whether received from India or abroad will be charged to tax.