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Income Tax

Rajesh (aa) (27 Points)

14 September 2018

My father sold his agriculture Land to Govt Corporation for Highway Road Development in Jan 2018. He received 20 L amount through direct transfer in Savings Account from Govt Road Authority.

Now my father want to distribute equal Amount of Rs 10 L between we 2 brothers

What will be Tax effects for us

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10 Replies

(Guest)

if 10 L given by father as a GIFT to his sons then it will exempt from tax u/s.56(2)

2 Like

Rajesh (aa) (27 Points)
Replied 14 September 2018

Thanks Jyoti

What is max limit for Exmpted Gift Amount

Ashwin Kumar (1229 Points)
Replied 14 September 2018

There is no limit for gift from relatives [as father falls under the definition of relative under sec56(2)] . your father can even give you rupees 1 crore as gift but better prepare a gift deed before enetring into transaction of ssuch huge amount.

1 Like

(Guest)

ya... totally agree with Ashwin kumar

1 Like

rama krishnan (12234 Points)
Replied 14 September 2018

but if it's Urban agricultural land, then your father have to pay capital gain tax on it

1 Like

Rajesh (aa) (27 Points)
Replied 14 September 2018

Thanks Ashwin,

It was Surely Agriculture Land in Rural Area

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 14 September 2018

Compulsory acquisition of any property is exempt u/s 10(37) rama krishnan

And rajesh the above amount can be taken as gift or in nature of loan from your father just make sure to make a gift deed.

1 Like

rama krishnan (12234 Points)
Replied 14 September 2018

attn: ruchika ji... only Urban agricultural land acquired by way of compulsory acquisition is exempt under 10(37) subject to certain conditions..

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 14 September 2018

but as per circular dated 25.10.2016 any land or building.

Kindly refer

rama krishnan (12234 Points)
Replied 14 September 2018

Ms. ruchika... cbdt circular speaks about exemption of agricultural land irrespective of rural and Urban agricultural land acquired under RFCTLARR ACT and only speaks about agricultural land and not about any other properties