Article explains Income Tax Treatment of Immovable Property Received as Gift Without Consideration or for Inadequate Consideration, Any property other than immovable property received Without consideration of For Inadequate Consideration and all those gifts which are fully exempt under Income Tax under Section 56(2)(X)

1. Cash:

If aggregate value is less than Rs.50000 than nothing will be taxable. If value exceeds Rs. 50,000, the whole amount will be taxable.

Gifts Taxation

2. Movable Property as Gift:

a) Without consideration:

Where any person receives, in any previous year, from any person or persons any property other than immovable property without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property will be taxable in the hands of receiver.

b) For Inadequate Consideration:

Where any person receives, in any previous year, from any person or persons any property other than immovable property for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration.

The excess differential amount will be taxable in the hands of receiver.

3. Immovable Property as Gift:

a) Without Consideration:

Where any person receives, in any previous year, from any person or persons any immovable property without consideration and the stamp duty value of which exceeds fifty thousand rupees then in such case, the stamp duty value of such property will be taxable in the hands of receiver.

b) For Inadequate Consideration:

Where any person receives, in any previous year, from any person or persons any immovable property for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts:

(i) the amount of fifty thousand rupees; and

(ii) the amount equal to five per cent of the consideration

The excess differential amount will be taxable in the hands of receiver.

4. Some Exempt gifts

If any gifts are received in following situations or from below mentioned people then those gifts will be fully exempt under Income Tax.

Any sum of money or any property received:

  • from any relative; or
  • on the occasion of the marriage of the individual; or
  • under a will or by way of inheritance; or
  • in contemplation of death of the payer or donor or
  • from any local authority or
  • from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or
  • from or by any trust or institution registered under section 12A or section 12AA; or
  • by any fund or trust or institution or any university or other educational institution or any hospital or other medical institution or
  • by way of transaction not regarded as transfer under clause (i) or clause (iv) or clause (v) or clause (vi) or clause (via) or clause (viaa) or clause (vib) or clause (vic) or clause (vica) or clause (vicb) or clause (vid) or clause (vii) of section 47; or
  • from an individual by a trust created or established solely for the benefit of relative of the individual.
  • any compensation or other payment, due to or received by any person, by whatever name called, in connection with the termination of his employment or the modification of the terms and conditions relating thereto

Note: In the above-mentioned points the term Relatives means

– Spouse of Individual

– Brother & Sister of Individual

– Brother & Sister of Spouse of Individual

– Brother & Sister of either of the parents of Individual

– Any Lineal ascendants or descendants of the individual

-Any Lineal ascendants or descendants of the spouse of the individual.

Below is a comprehensive list of Donors as per definition of relative under I.Tax Act (Hindi connotation has also been mentioned)

List of Male Donors  List of Female Donors
Father (Papa or Pitaji) Mother (Maa or Mummy)
Brother (Bhai) Sister (Bahin)
Son (Beta or Putra) Daughter (Beti or Putri)
Grand Son (Pota or Potra) Grand Daughter (Poti or Potri)
Husband (Pati) Wife (Patni)
Sister’s Husband (Jija) Brother’s Wife (Bhabhi)
Wife’s Brother (Sala) Wife’s Sister (Sali)
Husband’s Brother (Dewar) Husband’s Sister (Nanad)
Mother’s Brother (Mama) Mother’s Sister (Mausi)
Mother’s Sister Husband (Mausa) Wife’s brother’s wife (Sala Heli)
Father’s Brother (Chacha or Tau) Father’s Brother’s Wife (Chachi or Tai)
Father’s Sister’s Husband(Fufa) Father’s Sister (Bua)
Grand Father (Dada, Pardada) Grand Mother (Dadi, Pardadi)
Daughter’s Husband (Jawai) Son’s Wife (Bahu or Putra Vadhu)
Spouse Father (Sasur) Spouse Mother (Sas)
Spouse Grand Father (Dada Sasur) Spouse Grand Mother (DadiSas)
Brother’s Wife (Bhabhi) Mother’s Brother’s Wife (Mami)
Husband’s Brother’s Wife (Devrani or Jithani)

Republished with Amendments

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82 Comments

  1. Abhijit says:

    Dear TaxGuru,

    Greetings!

    If an individual gifts a property to a non profit entity are ether party, the donor/ the recepient subject to any tax?

    Thanks! Best regards abhijit

  2. Daughter says:

    I pay Rs.15000 to my parents every month from my salary as a gift. I woudl like to reduce this from my taxable income and include it in their taxable income. How to do that while filing my returns on the incometaxefiling portal?

  3. Chandramouli.S.S says:

    I am planning to build a commercial building on the plot owned by me and for this my son who is working in USA at present wants to transfer money to the tune of 80 lakhs. How to go about this process legally so that we do not have to pay any gift tax nor income tax on this money transferred to my account.

    1. Khushboo shah says:

      My dad wants to transfer some shares in mom’s name as a gift bt she wants have any other income .so is this income clubbed in my father’s income??

  4. SATHISH KUMAR says:

    Sir,
    It is regarding Gift tax. I would like to gift some amount to my Mother-in-law. If she, in turn, gifts the same amount to my Wife, whether I should consider clubbing of my income. Please reply.

  5. M Mariswamy says:

    I have intend to gift Rs.15 lakh to my daughter for purchasing of flat at bangalore.

    The above transaction is attract any gift tax under income tax act prevailing in India.

    Please clarify the said matter.
    Thanking You

  6. B Mishra says:

    Central govt took over my naani’s field for building road and gave her the compensatory amount after deducting the taxes.now c wants to give the amount to me ie her naati .My question is whether the amount is taxable or not?

  7. Alok kumar says:

    one employee of a company died .some friend also co-employees decided to provide support to his wife & children(Minor) of deceased friend by giving money to them.The amount contributed is more than rs 500000 .What is taxability in hand of deceased wife.

  8. amandeep singh says:

    my uncle(my father’s sister’s husband (fufa ji). can my fufa ji gift me property amounting rupees 53 lakhs and what should be the tax i have to pay? weather immediate tax or at the time of selling the property? doner and the reciever (me) both are indian and the property also in india.

  9. Bhavin Shah says:

    take it in cheque. if you are thinking to take it in the form of gift then you can’t take but as a unsecured loan with regular payment of interest then you can in your business.

  10. Bhavin Shah says:

    In my opinion, Taxability of Interest income of Rs. 24,500.00 would be in the hands of Donor – Thanks to clubbing provision.

    If HuF received above sum of money inheritance then it won’t be taxable.

  11. Bhavin Shah says:

    Your uncle can gift you in his individual capacity but not as a KARTA of their HUF., In my opinion – I am also not sure but i replied based on my logical discretionary power.

    Contact : for more information , we would like to help you in this matter.

    E-mail : theintegrateservices@gmail.com

  12. Bhavin Shah says:

    In my opinion, The contention of I.t. department is right. Gift received by the Relative is exempted but Nanaji is not covered up within the definition of relative.

    No doubt there is required clarification degree of generation up to what you can benefit but that benefit you can take to argue and get 0 penalty

    maternal grand father not covered up.

    For more guidance and discussion :
    Contact :
    CA Bhavin Shah
    E-mail: theintegrateservices@gmail.com

  13. Bhavin Shah says:

    In fact, If your wife is active businesswoman then you may show it as a pure unsecured loan on the basis of relation and trust and by that way you can avoid tax.

    Otherwise prima facie certainly you would get notice from i.t. department.

    E.g. Take an example of case of Mr. Shahrukh khan and Gauri Khan

    Contact us for more discussion and service:
    CA Bhavin Shah
    The Integrate Services

  14. Bhavin Shah says:

    If brother and his spouse gift to his sister and her spouse, means brother and his wife of a girl to that lady as well as her husband. in such case it would be taxable in the hands of that lady as well as husband if such value above limit. , in my opinion.

    I may understood your question wrongly. you may write us again

    Contact
    E. theintegrateservices@gmail.com
    CA Bhavin Shah

  15. Bhavin Shah says:

    First of all – no one indian company would accept it. Further, if you are working abroad, then you may do like that but it would be taxable in their hand and you have to create wrong consultancy biz for them.

    If you are not willing to do that then it would unsecured loan to your parents – accounting treatment
    and in Taxation- Interest earned on that F.D. would be taxable in your hands – Thanks to clubbing provisions.

    For Tax & technical discussion:

    Contact
    E. theintegrateservices@gmail.com
    CA Bhavin Shah

  16. Bhavin Shah says:

    It would be taxable because Your sister’s son is not covered up within the definition of Relative. Your sister can gift you but not your sister’s son.

    For more clarification & discussion:

    Contact for more discuss & Chat –
    E. theintegrateservices@gmail.com
    CA Bhavin Shah

  17. FAIJAL says:

    I have doubt plz Clarify…….

    section 56 (Gift) mai Immovable Property (Land, Building or Both), but Sir Donor ne Third Person ko Hotel Gift kiya usme Land or Building include hai but sir Donee ke hands mai tax Calculation mai only Land and Building but not Hotel Furniture Taxable nahi hoga….kyu ke Section 56 Mai immovable property mai Only Land & Building Taxable Hoga…..NOT INCLUDE hOTEL FURNITURE IN HAND OF DONEE….

  18. manoj says:

    Thank you for this wonderful clarification and explanation of the above relationship on transfer of gift.

    I have a doubt please clarify:

    My Bhanja ( Sisters son ) purchased an agriculture property in 2008 and now he wants to gift that same property to me ( mama ). What would be tax implication. Can you clarify whether it is taxable or non-table.

  19. Khushbu says:

    What if I transfer my salary to my Parents accounts (Joint Bank account) and they create fixed deposit of that money. What will be the tax implications on interest earned on fixed deposit?

  20. Rohit says:

    If a relative has huge salary income say 4-5 crores, can it be transferred to other family members, for converting black into white money.

  21. James says:

    My father purchased a property in 21/5/2010 worth of 283000 and he registered the property to me through sales deeds not through gift, in sales deeds property value is written as 718000 on 30/4/2013. Income notice has come regarding capital gain tax. Is there any way to prove that there is no money transferred in this case and it’s been registered to son by father and if so will it save the capital gain tax?

  22. SHUBHAM AGARWAL says:

    Dear Sir,
    If brother and his spouse gift a immovable property to his sister and his spouse, where stamp duty value is more than 50k. So what are the tax liability to brother, sister, and there spouse? Please guide.

  23. SHUBHAM AGARWAL says:

    Dear sir
    If bother and his spouse want to gift a immovable property to his sister and his spouse which is 8500000 Rs. Where the. Stamp duty value more than 50k. So what are the income tax liability to brother, sister and their spouse.?

  24. SHUBHAM AGARWAL says:

    Dear sir
    If bother and his spouse want to gift a immovable property to his sister and his spouse which is 8500000 Rs. So what are the income tax liability to brother, sister and their spouse.?

  25. Arvind Ahluwalia says:

    My maternal grandfather (Nana Ji) had gifted his shop to my wife in Aug 2014 and at that time market value of the shop was 15.59 lakhs. He paid stamp duty also on 15.59 lakhs. Here I also want to clear that my wife is full time home maker and has no extra source of income.

    1: Does my wife have to pay income tax on this gifted shop( i.e 15.59 lakhs)?

    According to my CA, this property is tax free because as per IT rules this comes under ” Lineal ascendant of spouse” category, under section 56 income tax act1961 which is tax free.

    But surprisingly 4 days before I have received notice from It office and today I have a meeting with IT Officer and they clearly mentioned that they can not consider my maternal grandfather (nanaji) and my wife in Lineal Ascendant of spouse category ( for the shop gifted by my nanaji to my wife). They are asking for law number/Income Tax rule no. for the same in which it may be clearly mention that gift received from husband’s nanaji is tax free.

    Could you please help me to know the law no/ Income Tax rule no. for the same.

    Looking forward for your help.

  26. UTSAV says:

    Sir,

    MY HUF HAS RECEIVED RS. 750000/- AS GIFTS FROM RELATIVES DURING THE F.Y. 2014-15 RELEVANT TO A.Y 2015-16. THERE IS AN INTEREST INCOME OF RS 24500/- ON FDs THAT HAS BEEB MADE OUT OF THESE GIFTS. WHAT IS MY TAX LIABILITY FOR THE A.Y. 2015-16 ? I AM YET TO FILE MY ITR FOR THE A.Y. 2015-16. PLS ADVISE AT YOUR EARLIEST.

    RGDS.

    UTSAV

  27. RAKESH PAREEK says:

    Can I gift Rs 80000 from my salary account to my adult daughters saving account (first account holder herself & second account holder my self) every month to meet out fee of medical & engineering colleges for a period of about 5 years. They deposit this amount in a Recurring account.Please clarify is it as per income tax rules.

    ThankS

    1. NIRMAL BOSE says:

      Dear Rakesh

      If you give give gift to your daughter, whatever amount, it is not taxable. After receiving the the gift if your daughter depposit in FD OR RD the interest received from the amount will be taxable on her part if it exeeds 250000 in one year as per the present income tax slab.

  28. RAKESH PAREEK says:

    Respeected sir,
    Can I gift Rs 80000 from my salary account to my adult daughters saving account (first account holder herself & second account holder my self) every month to meet out fee of medical & engineering colleges for a period of about 5 years. They deposit this amount in a Recurring account.Please clarify is it as per income tax rules.

    Thanking you
    RAKESH PAREEK
    RPAREEK1963@GMAIL.COM

  29. B Pradhan says:

    Please guide……….

    Post retirement my husband has transferred money into my account which exceeds Rs. 50,000. I have made investments in FD, Mutual Funds etc. I do not have any other source of income other than from these investments.

    Following are my doubts:

    1) So as I understand, the amount transferred by him into my account will not be taxable in my hands as it is gifted by my spouse.

    Am I right with the interpretation of Law in this regard?

    2) I also want to make sure that this amount will not get clubbed in my husband’s income.

    3) In whose hands will the interest on the investments will be charged to tax? Will it be clubbed in my husband’s income?

    Thank you!

    1. SHESHGIRI V JOSHI says:

      DONNER IS HUSBAND DONEE WIFE

      GIFT AMONT IS RS 20 LACKS DONEE WILL DEPOSIT SAME AMOUNT TO BANK

      THE INTEREST EARNED ON FD IS WHETER TAXABEL IN THE HANDS OF DONEE OR THE DONNER

      THE DONNE IS ALREADY ASSESEE TO THE INCOME TAX KINLDY CLARIFY THE ISSUE

  30. JOLIKA GUPTA says:

    the Naana wants to “gift” to her Daughter’s son.
    can “Naana” gift “nawasa”(daughter’s son)? what is the tax liability in such a condition and who will pay and how much? Naani’s age is around 62 years.

    Kindly reply

  31. Mohit says:

    My son got married in March 15. How much of Amount I can gift him that is tax free ? Can this be transferred to My HUF account, as my son is one of the member ? Who can gift for tax free amount to marrying person and how it can be used for HUF capital raising ?
    Mohit Parikh

  32. sharma rk says:

    Naani( mother’s mother) residing in Delhi had purchased a property in the last quarter of the year 2002 for Rs. 1.65000/- rupees.

    She sells that said property on a hihger rates for e.g. Rs.9 lacs today.

    She purchases another property for her own use as she is not having any property for her living purposes in Delhi. So, she purchases another property in Delhi for her own use. she purchases it in Rs. 9 lacs.

    Now, immediately, after purchase of the said property, the Naani wants to “gift” the new purchased property to her Daughter’s son.

    can “Naani” gift a house to his “nawasa”(daughter’s son)? what is the tax liability in such a condition and who will pay and how much? Naani’s age is around 62 years.

    kindly advise.

  33. girish chhabra says:

    if donor is mother and donee is daughter, and she gifts rs20000 pm ie 120000 pa
    is this donation be able to reduce the total taxable income of donor. Eg 600000 pa is mother’s taxable income. will it now be 480000 or same 600000.
    In other words
    Will the tax liability of donor be affected.

  34. variya bhavin says:

    if i give land to my wife as on 15-4-15, SDV is 49000 and further transfer as on 2-6-15 SDV is 49000 all gift is without consideration, what is tax liability on the hand of me.

  35. samar says:

    dear Sir,

    if i have to gift cash in excess of Rs 30,000/- to my wife on monthly basis ,is it exempted from tax ?
    how can I claim the exemption in my tax liability …under which section .

    samar

  36. Aakanksha says:

    Father gifts moveable property to his sons & daughters & wife, who will pay I Tax on the income generated by these gifted property.

  37. sohan says:

    sir, i gain rs 650000/ during marriage by father in law and his brother( WIFE UNCLE) by bank transfer. is it taxable? how i can save tax? how much i have to pay as a income tax?

  38. Dinesh chandra says:

    In case of immovable property two points discussed above (at s.no.iv)still needs clarification please.
    For donee :-
    1) COA will be SDV (whose COA- if it means  the COA of the donor which was in thousands at the time of acquisition and the value today has gone up in lakhs( the SDV is in lakhs)  then what will be  the SDV ?) Pl. clarify it.
    2)what is the purpose of counting of holding period from the date of acquisition by donee. Pl.  Clarify it for the benefit of common man who is not so expert in this field.

  39. Yogesh says:

    Which ITR to fill for HUF Returns & There is no income other than Gift from HUF Karta .
    Where to show this GIFT from Karta on HUF return form.

    Thanks in Anticipation!!

  40. USHA GARG says:

    Dinesh Chandra:
    No capital gain for donor, and no taxability for donee arises since donor is a relative of donee as per Income Tax Act. Thus naatee or damaad will not bear any tax in this case.

  41. Manish Soni says:

    Further in case there is a time gap between date of agreement to purchase the immovable property and the date of registration of immovable property and due to this time gap the SDV of immovable property has increased as on registration date as compared to SDV as on date of agreement then the difference amount will not be taxable in the hands of recipient PROVIDED that at least a part of total consideration has been paid by any mode other than cash on or before the date of agreement.

    E.g. Mr. Arman booked a 2BHK flat in Noida in the year 2009 for INR. 40 Lac and paid INR. 5 Lac as booking amount by way of a/c payee cheque. At that time SDV was INR. 35 Lac.

    Now in 2014 he got possession of flat and got the registry done by paying stamp duty. However SDV at the time of registry was INR. 50Lac.

    In the instant case nothing is taxable in the hands of Arman as he had paid advance money by way of cheque as on the date of agreement.

  42. s sudarshana says:

    The article is well written informative and a must for a family who should know the tax implication of gift. Intentions are different and rules are a different. One is expected to follow the rules and regulations and ignorance is no excuse.
    Appreciation to the writer of the article!

  43. R S SHAH says:

    Can the administrator or anyone please send the format for calculation of capital gainsetc. on redevelopment in Mumbai. for individual flatowners in a coop society, who gets additional area, free of cost, some compensations and some corpus fund. The flatowner would have purchase the flat more than a decade back. also does he have to get the valuation done of old flat and new flat market value ? indexation etc.

  44. Dinesh chandra says:

    What will be the position if mother in law gifts agricultural land to her deceased daughter’s husband (damaad) or to daughter’s children (natee) where the stamp duty value is greater than 50k and COA is of 1986. What is PGBP ?

    1. Shraddha says:

      Can I receive cash 150,000 as a gift from my grandfather in law.is this transaction come under exception to gift taxability. I.e. under definition of relative. Plz reply.

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