Tax implication on gift of residential property

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 June 2014 A owns a flat and transfers it to his mother-in-law by means of a gift deed. The gift deed is registered and property transfer is also registered and due stamp duty is paid.
Are there any tax implications of this transaction for A? Is any LTCG deemed to accrue to him on this transfer? Is he required to indicate this transaction in his ITR2? There is no column in the House Property portion of ITR to indicate this transaction. Has he to mention it in CG portion any where?
What is the tax implication for Mother-in-law?
Please give your views.

Nikhil Kaushik

Nikhil Kaushik (Expert)

08 June 2014 1. it is not a taxable transaction. exempted under section 56(2)(vii).

2. you are not required to indicate this transaction in ITR.2

3. any future income from this house will continue to be clubbed in the hands of Mr A.

4. there is no tax implication for the mother in law.

Querist : Anonymous

Querist : Anonymous (Querist)

09 June 2014 The ownership of flat has been irrevocably transferred to mother-in-law and transfer deed is registered. I think clubbing provision will not apply. Please advise if I am right and if your opinion is otherwise, please mention the section number under which clubbing of future income is required.
Thanks

Nikhil Kaushik

Nikhil Kaushik (Expert)

09 June 2014 any transfer without adequate consideration will attract clubbing. refer section 64.

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