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Gift tax
suppose A who is the uncle of B, gifts an immovable property to his nephew B and also making B's wife as the co-owner of the said property, will there be any tax implications in the hands of nephew's wife??
will she be regarded as the relative under income tax act??
Replies (6)
Uncle of spouse is not covered in the definition of "relative" as per income tax act,1961. So, any gift being immovable property received from a person other than his/her relative is taxable u/s 56(2)(vii) if it is received without any consideration and fair market value of such property exceeds Rs.50,000.
A is the uncle of B
property has been gifted to B in which B's wife is the co owner....
Then what are the tax implications??
Since 'A' is not relative of B's spouse hence such gift shall be taxable under the head Income from other sources and will be exempt in the hands of B. To determine the taxable amount in the hands of wife we have to check the fair market value of such property and wife's share in property.
Thank you so much :)
Practical way to avoid paying/reduction of gift tax would be specify the percentage of shares in the Gift deed itself, like 90:10 or 80:20
Simply you can treat the joint name holder in the property as the coapplicant if her name is second by treating the first applicant as 100 % owner of the property. YOu can treat the second name holder as coapplicant without any ownership rights. Then no tax will be attarcted. Can show such an intention of the doner by making a seprate family agreement for showing such an intention.
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