15 March 2022
After the demise of my both parents, in terms of a Will executed by my father, myself alongwith my 3 younger sisters and wife of my pre-deceased younger brother are co-owners of my father's self-aquired flat, having equal ownership rights of 20% each.
My sister-in-law (deceased younger brother's wife) wants to take my share. Consideration agreed is 20% of the value for stamp duty. I am being requested to execute a Relinquishment Deed, with 'no consideration' whereby the same can be registered without payment of any stamp duty. And it is proposed that the amount would be paid to me under a Gift Deed.
My queries: 1. What is my liability if the authorities question non-payment of stamp duty? 2. What is my liability to income tax in respect of the amount received under a Gift Deed? 3. Is amount received from deceased younger brother's wife under a Gift Deed exempt from Income Tax? 3. Can I claim non-applicability of income tax on the grounds that it is received in terms of inheritance?
18 March 2022
Thank you, Seetharaman sir. As regards Income Tax on the amount to be received by me towards relinquishment / transfer of my share of ownership rights, I believe I can claim non-applicability / exemption on grounds of income by way of inheritance; or as gift received from a relative defined under the Income Tax Act; or as amount being equivalent to stamp duty value.
As regards Stamp Duty, I request a few more inputs from you. Who is the person liable to pay - buyer or seller? In case at a later date the authorities take a view that it is a coloured transaction, on whom will they raise the demand - buyer or seller?
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