An immovable property has been acquired in the year 2003 without any consideration. The only consideration being services rendered by the acquirer in the nature of help in clearance and setting up the project in which the immovable property exists.
Question1
What shall be the implication as far as Gift Tax Act is concerned? (Given to understand Gift tax was abolished in 1998)
Question2
If immovable property was acquired in the year 2005 then what shall be the implication under sec 56 of the Income Tax Act. (Sec 56 was not applicable to immovable properties then)
12 April 2011
In what Form The Title was Acquired ?? If Gift Deed was Executed what Amount Mentioned in The Gift Deed as a Consideration of land. If Consideration was NOT mentioned. IT Department's Approved Valuer Should be Appointed to Compute Cost of Acquisition at the Time of Gift. as i remember in 2003, entire Gift Amount were Income of Donee and not the Donor. if You escaped the Same in that Year, You may be penalised for Concealment of Income. Leave All Above Fact, If It will be Sold in the Future Cost of Acquisition Will Be Nil, Sales Proceed will be Calculated For Long term Capital Gain, By Calculating Previous Owner's Cost of acquisition. and LTCG may be calculted accordingly... Here Gift Tax Act is Not Being Attracted At All.
Given to understand, gift tax was abolished in the year 1998. So it seems there won't be any question regarding Gift Tax payable. Sec 56(2) of IT Act that became effective from 01.09.2004 made cash gifts from non relatives chargeable as income beyond a certain limit. The said section was applicable to immovable properties only from 01.10.2009.
I just need an affirmation of above that if a deed for acquiring immovable property without consideration and with a non relative was executed in the year 2005 than no tax implication would arise. Neither under Gift Tax nor u/s 56 (2) of IT. Act. Pl reaffirm the same.
CAclubindia
