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Gift Tax in India

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gift tax

My son has gifted me some equity shares by transferring from his demat account to my demat account on an off market deal. what is the tax implication, r.c. suvarna (via mail)

Answer : (sanjiv swarup) Gift from your son should not attract any gift tax. However refer to the relevant article (see below )(reply sent-070731)


Question: gift money to my daughter in law

I am a retired pensioner and I file my tax returns regularly. I want to gift some money (a few lakhs) to my daughter in law who has her own PAN also. Should she show this in her tax return? What documenmtation should we keep for such gifts in their tax files both me and my daughter in law? Kaushik Chakraborty (via mail)


Answer : It is always better to be transparent in tax dealings. Yes, she should show this in her tax return. Try to make the payment by cheque. Documenmtation to be kept for such gifts in both your tax files include the circumstances under which yuo have made the gift, eg out of natural love and affection. Please read our article on Gift Tax(reply sent-070719)

Question: My father has transferred?

Q: My query is as under. My father has transferred his self earned house on wife's name through a gift deed duly registered. My father is a retired non tax payer whereas my wife is self employed (Runs coaching class)and a regular tax payer. My father is dependent and stays alongwith us in the same house. What would be the gift tax liability if any in this case? What is the way out to save this if it comes? abhay pandurang dabir(Via mail)

Answer: Gift tax is not attracted as it is Gift in Kind. how ever any income out of that property will be treated as income of your father under clubbing provisions. (gift tax) CA Bhavik Parikh


Question: Gifting terrace to my son for construction

Q: Which is the best option for me (retired)to gift the terrace right to my son for the construction of first floor with bank financial assistance or to construct first floor with bank loan & later on to rent out to my son so that he may avail IT deduction & I can also avail the deduction being the loan raised from the financial institution? The main purpose for availing the loan facility is for the income tax rebate by both. Gaurav Mehrotra (via email)

ANSWER:

GIFT AND LET THE DONEE RAISE THE LAON AND CONSTRUCT IT. YOU WILL SAVE STAMP DUTY AS WELL AS OTHER PROBLEMS. ssunderagarwal@sify.com
(reply sent-070712) ---

Question: I am working in a private company?

I am working in a private company and my wife is a housewife. I have opened a DMat Accout on my wife's name. Gradually I have transferred around Rs 3 lakh in my wife's bank account and invested them in shares. So far the income from selling the shares is around 50,000 in 2 years. I want to file the return for my wife's name and don't want to have any tax liability for her. Since the income from short term capital gains in much much below Rs. 1,35,000. Please guide me about: 1. How to adjust the income under heads "Tutions" and "short term capital gains" so that the tax liability is 0 ? 2. If the return of Rs 1,35,000 is filed for 3 years conscutively (making her total income = Rs. 4,05,000), then the amount in my wife's account will be treated as her only ? vivek upadhyay (via email)

ANSWER:

AS REGARDS YOUR WIFE IT CAN BE TREATED AS GIFT BY YOU AND THE INCOME CAN BE CLUBBED WITH YOU.ssunderagarwal@sify.com
(reply sent-070705)

Gift Tax Act

Section Topics

1 Short title, extent and commencement

2 Definitions

3 Charge of gift-tax

4 Gifts to include certain transfers

5 Exemption in respect of certain gifts

6 Value of gifts, how determined

6A Aggregation of gifts made during a certain period

7 Gift-tax authorities and their jurisdiction

7A Powers of Commissioner respecting specified areas, cases, persons, etc

7AA Concurrent jurisdiction of Inspecting Assistant Commissioner and Gift-tax Officer

7B Power to transfer cases

8 Control of gift-tax authorities

8A Commissioners of Gift-tax (Appeals)

9 Instructions to subordinate authorities

9A Directors of Inspection

10 Jurisdiction of Assessing Officers and power to transfer cases

11 Inspector of Gift-tax

11A Commissioner competent to perform any function or functions

11AA Gift-tax Officer competent to perform any function or functions

11B Control of gift-tax authorities

12 Gift-tax authorities to follow orders, etc, of the Board

12A Power of Chief Commissioner or Commissioner and of Deputy Commissioner to make enquiries under this Act

13 Return of gifts

14 Return after due date and amendment of return

14A Return by whom to be signed

14B Self-assessment

15 Assessment

16 Gift escaping assessment

16A Time limit for completion of assessment and reassessment

16B Interest for defaults in furnishing return of gifts

17 Penalty for failure to furnish returns, to comply with notices and concealment of gifts, etc

17A Penalty for failure to answer questions, sign statements, furnish information, allow inspections, etc

18 Rebate on advance payments

18A Credit for stamp duty paid on instrument of gift

18B Additional gift-tax

19 Tax of deceased person payable by legal representative

19A Assessment of persons leaving India

20 Assessment after partition of a Hindu undivided family

21 Liability in case of discontinued firm or association of persons 21A Assessment of donee when the donor cannot be found 22 Appeal to the Deputy Commissioner (Appeals) from orders of Assessing Officer 22A Application by the assessee in certain cases 23 Appeal to the Appellate Tribunal 24 Powers of Commissioner to revise orders of sub-ordinate authorities 25 Appeal to the Appellate Tribunal from orders of enhancement by Chief Commissioner or Commissioner 26 Reference to High Court 27 Hearing by High Court 28 Appeal to Supreme Court 28A Tax to be paid notwithstanding reference, etc 28B Definition of High Court 29 Gift-tax by whom payable 30 Gift-tax to be charged on property gifted 31 Notice to demand 32 Recovery of tax and penalties 33 Mode of recovery 33A Refunds 34 Rectification of mistakes 35 Prosecution 35A Offences by companies 35B Offence by Hindu undivided families 35C Section 360 of the Code of Criminal Procedure, 1973 and the Probation of Offenders Act, 1958, not to apply 35D Presumption as to culpable mental state 35E Proof of entries in records or documents 36 Power regarding discovery, production of evidence, etc 37 Power to call for information 38 Effect of transfer of authorities on pending proceedings 39 Computation of period of limitation 40 Service of Notice 41 Prohibition of disclosure of information 41A Publication of information respecting assessees 41B Disclosure of information respecting assessees 41C Return of gifts, etc, not to be invalid on certain grounds 42 Bar of suits in civil court 43 Appearance before gift-tax authorities by authorised representatives 43A Appearance by registered valuer in certain matters 44 Agreement for avoidance or relief of double taxation with respect to gift-tax 44A Rounding off of taxable gifts 44B Rounding off of tax, etc 45 Act not to apply in certain cases 46 Power to make rules 46A Power to make exemption, etc, in relation to certain union territories 47 Power to remove difficulties

See also

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