Gift from relative

Tax queries 262 views 2 replies

Sai Prabhu Narayanan

Articled assitant

161 Points Joined September 2017

Greeting,
Any sum of money received from a relative is tax free however rule states that there must be supporting Gift deed . My query is that should the gift deed be registered, or mere signature of donor & donne is enough with supporting witnesses.Is there any format which should be followed for drafting a gift deed.

Replies (2)

Koushik Das

Self employed

40 Points Joined November 2017

Registration for gift deed is mandatory for immovable property. Registration of gift rendered through cash/cheque is not mandatorily required to be registered.
source: taxmantra.com

Suresh Thiyagarajan

Student

3986 Points Joined July 2018

1. Yes, any gift in the form of cash or in the form of immovable property will not be subject to tax if the same is between relative as per sec 56(2)(x) of the act.
2. However, if the gift is in the nature of immovable property in order to make it leagl gift deed needs to be executed. For that, a proper agreement should be prepared and registration should be done in the name of the transferee. Stamp duty charges are payable according to the law of the state in which the registration is done.
3. Registration of property is a must through proper agreement. Other than immovable property normal gift deed (regular agreement like rental agreement) is enough.
Please correct me if the above solution has an alternative view.