Stamp Duty & Gift Tax
Querist :
Anonymous
(Querist) 05 June 2010
This query is : Resolved
Sir,
There has been conflicting answers received for my query. I shall be thankful if you kind enough to clarify the following on the GIFT TAX
1. the original value of the shop purchased 5 yers ago is say 30 Lakhs
2. Present market value as per Circle rate is say 35 Lakhs
3 Now a sale deed was prepared at discounted price of Rs 5 Lakhs as it was sold at Rs 5 lakhs to "relative" (son of elder Brother) out of love and affection .
Kindly let me know whether the Income Tax is Payable at Rs 35 Lakhs by the Donee (Real nephew) OR
An amount of 5 Lakhs is Taxable OR
It is total tex free as it falls in the Gift Categories
I shall be thankful if u kindly let me know the details and other precaution to be taken while preparaing the sale deed and gift deed
Regards
Riya
Vineet
(Expert) 05 June 2010
As far as nephew is concerned, since it is a case of gift u/s 56 to the extent of difference btween market value and sale deed consideration. However, as the same comes from you, sister of her father, being a specified relative, there will be no tax liability in his hand.
For you, it is a clear case of sale and the sale consideration shall be same as value adopted fo stamp duty (Rs 35 Lakhs). So there may be incidence of long term capital gains tax in hand depending upon the exact values and indexation.
It would have been better if you had executed a gift deed so that the incidence of stamp duty might have been lower (in some states). However in that case you would not have been able to receive the consideration of Rs 5 Lakhs as the sum received from your nephew without any consideration is taxable in your hands as income from other sources.
Hope this clarifies.
Querist :
Anonymous
(Querist) 05 June 2010
Thanks
Regards
Riya
