Gifting of money to relatives and related taxation issues

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2018 Dear Sir,

I am a 40 year old salaried employee under the 30% tax slab. My father had originally purchased a land which he transferred to me vide a settlement deed. I have subsequently availed a housing loan & constructed a house in the land in 2007. With the loan being repaid in full, I have now decided to sell the property (Approx Sale value Rs. 50 lakhs)

As the land was purchased by my father from his own funds, he wants to give 50% share of the sale proceeds to my sister who is married. Please let me know on the following:

1. Can I transfer / gift Rs. 25.00 lakhs through Banking channel to my sister. Are there any restrictions on upper limit for gifting in a FY? What will be tax issues arising to me / to my sister on the transfer?

2. Will clubbing provisions arise for the above transfer as she is my blood relative.

3. I also intend to transfer a portion of the funds to my parents to avail higher interest in FD's (being super senior citizens) and also to take advantage of the income tax slabs applicable to them.

Please advice on the taxation issues especially w.r.t clubbing provisions under the above scenario.

Regards.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

28 October 2018 1 Yes you can transfer 25 lacs to your sister as gift no tax payable no upper limit.
2 No clubbing provisions applicable.
3 Yes you can gift to parents no tax payable.

Capital gains tax on sale payable by you.

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