Income tax implication on Gifts to Relative_Immovable Property

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This discussion explores the income tax implications when a commercial property is gifted to a spouse. While gifts between relatives are generally tax-exempt, the income generated from the gifted property will be clubbed with the husband's income. If the transfer is structured as a sale agreement with adequate stamp duty, capital gains tax may apply, and payment should be received from the wife.

Dipen

Dipen (Querist)
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30 August 2023 Dear Experts,

If a commercial property (currently in name of individual) , 50% ownership of the same is transferred to his wife as gift without any consideration, will it be taxable in hands of wife or husband? Required stamp duty on registration of the gift deed will be duly paid

Please advice

Regards,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 August 2023 It will not be taxable in both the hands as gift from relative exempt from tax.
Only the income from the gifted property will be clubbed in the hands of husband.

Dipen

Dipen (Querist)
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31 August 2023 Noted.

If a proper sale agreement is prepared at adequate stampduty valuation for 50% transfer of share in the property , then too clubbing will be applicable? And will be taxable in hands of husband as capital gains?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 August 2023 Payment should be received from wife for the sale agreement.
Capital gains tax payable on this transfer.

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