Apartment as gift to relative

Others 1310 views 10 replies

Sal

53 Points Joined July 2011

Hi,

My wife and I have a under construction flat that is booked under joint name of my wife and me. We have paid around 80% of the payment to the builder (50 lacs out of around 62 lacs) . My wife and I want to gift the property to my mother. The remaining 20% of the pending amount would be paid by my mother.

From various other posts, I got to know that this does not involve any taxation. Can you please tell me whether there would be any tax liability on me or my wife on the rental income that this house may generate in future after completion ?

Thanks !

Replies (10)

Sunshine

Helping All

10575 Points Joined March 2010

Its clear that there wont be any tax liability when u gift ur house to mom...Tax liability on rental income arises out of ownership of house...Now that u have transferred the ownership to ur mom , she will be the owner and income on house property will be in her hands .So ur mom will pay the tax by virtue of section 22.

U and ur wife wont have ant tax liability

Sal

53 Points Joined July 2011

Thanks Sunshine for the quick reply. I dont want to sound rude but want to confirm whether you are sure about this? The reason for the question is because similar posts on internet have different answer.

For example, a post on different forum (https://www.thinkplaninvest.com/2009/01/income-tax-exemption-and-rules-on-gifts-as-income-of-source/) says:-

1. you can gift your house to your mother, that will not attract any gift tax. But, if the house is given for rent, then rental income is yours.

Also, extract from one of the posts on this forum:-

If you gift the flat to the HUF, the rent income will be clubbed in your hands u/s. 64(2). So the income will again be taxed as if it is your income and not as income of HUF.

Complete post is available at:- /experts/tax-on-rental-income-626860.asp

Sunshine

Helping All

10575 Points Joined March 2010

ya m sure abt this...no provision of clubbing will be attracted here....

Still if u wanna confirm wait fr others to reply..

Chintan

Accounts and Finance Executive CS Execut

98 Points Joined July 2011

agree with sunsine

Vijay

Adamo Studio

2112 Points Joined March 2011

Clubbing pro do not apply here.

CA. Vikash Dwivedi

Financial Planning & Analysis

3167 Points Joined January 2008

this kinda mentality really irritates me.

On the one side you have bought property worth 62 lcks on the other hand you are looking for way out not to pay tax.

Recently Saching tendulkar asked for Income tax authority to allow him dedeuction of income of Rs. 2 crore under sports quota. does this kind of begging is justified by person who is earning 100-200 crores an year. In the past also he filed a suit against his Chartered Accountant for charging Service Tax of 2 lacks on Consultation fees of 40 lacks. And he says he thinks for Country.... Does he??

why people abstain from paying tax and that too by those who can pay?

Mihir

Wealth Manager

5293 Points Joined December 2008

Gifting the apartment will attract stamp duty. Income generated from that apartment will be the income of the owner, which is your mom. But, you can avail 30% deduction u/s 24 and assuming your mom to be a senior or very senior citizen,

CA Abhiram Bharat.

Assistant Manager Taxation

508 Points Joined March 2008

first of all this is an exempt asset in ur mam;s hands by virte of sec 56(2)(vii).. also,,the income derived therefrom ,if let out will be taxable in ur mam's hands, but she can also claim this house as self occupied ..if she has more than one house as self occpied...after recieving this house as gift from u..other house will be deemed to be let out..

Sal

53 Points Joined July 2011

@ Vijay/Vicky, Can you please elaborate, I dont know what clubbing pro means ?

@ Mihir, the house is under construction so this should not attract any stamp duty.

@ Vikash, thanks for nice talk on morality. This is off topic so wont reply to this any more.

Thanks everyone for answering this question and helping me out.

Guest

Originally posted by : CA Abhiram Bharat.
	first of all this is an exempt asset in ur mam;s hands by virte of sec 56(2)(vii).. also,,the income derived therefrom ,if let out will be taxable in ur mam's hands, but she can also claim this house as self occupied ..if she has more than one house as self occpied...after recieving this house as gift from u..other house will be deemed to be let out..