Gift of Immovable Property u/s 92 of Income Tax Act,2025

The gift of land valued at ₹2 Crores is 100% tax-exempt because a biological uncle's wife and an adoptive mother both fall under the definition of an exempt "relative" u/s 56(2)(x). Frame the Gift Deed mentioning both the biological relationship and the registered adoption deed to clear registration requirements. In your father's books, record the asset at ₹2 Crores credited to Capital/Reserve to reflect true net worth, while maintaining ₹15,000 as the statutory cost basis for future capital gain calculations u/s 49(1).

Glad the gift exemption is sorted. One critical planning point for when this land is eventually sold.

At the time of the GIFT itself:
- Tax exempt under Section 56(2)(x) because the donor qualifies as a relative. Correct.
- Record the land at Rs 2 crore (stamp duty value) in the books.
- Cost of acquisition for capital gains purposes: the DONOR's original cost (Rs 15,000) carries forward to you under Section 49(1). You inherit both the original cost and the period of holding.

At the time of EVENTUAL SALE of the land:
- Your cost of acquisition = Rs 15,000 (not Rs 2 crore).
- If the donor held it for more than 24 months before gifting, you inherit that holding period, making it LONG-TERM CAPITAL GAIN from day one of receipt.
- On a future sale at, say, Rs 3 crore, your capital gain = Rs 3 crore minus indexed Rs 15,000 - approximately Rs 2.95 crore of taxable LTCG at 12.5%.

Planning note: if the original purchase documents (cost Rs 15,000) are not available, the deemed cost substitution under Section 55(2)(b) for pre-2001 property can reduce the LTCG significantly. Worth getting a registered valuer report for the April 1, 2001 value now while the gift transaction is fresh.

This [gift tax rules under Section 56(2)(x) and future capital gains guide](https://taxgarden.in/blog/gift-tax-rules-india-section-56-2-x-ay-2026-27) covers the recipient's future LTCG implications in detail.