Is gift tax applicable ?

Hello all,

Consider the following family members A,B,C,D,E,F

B is the father of A

C is the mother of A

D is the brother of A

E is the wife of A

F is D's wife

A wants to buy a new property for which he has the following three category of funds.

x=> A's savings

y=> Public sector bank loan

z=> sum of all the borrowed funds from B(z1),C(z2),D(z3),E(z4),F(z5)

Is the gift tax applicable on z or individual components for z1,z2.. etc for that matter ?

Apologies for a tad long descriptttion but just wanted to convey all the relationships subject has and if there are any legal implecations

 

Replies (4)

"A wants to buy a new property........"

No gift tax applicable, as all are relatives as per I T Act, 1961 and hence exempted.

But gift from E(Z4)) gets clubbing provision, so if the property is let out,  that part of rental  income will get assessed in the hands of E.

It is advisable to purchase the property jointly with wife, wherein wife may directly invest her capital as part of her share.

Thanks you Sir for a prompt response.Excerpts from you answer

"But gift from E(z4) gets clubbing provision, so if the property is let out, that part of rental income will get assessed in the hands of D."
So where does D come in the picture with reference to z4 ? Did you mean A instead of D ?
 
Regards
Garima

Sorry, its not D.............. but Wife E (corrected earlier one, thanks)

No Gift tax is applicable here as Gift received from family members is exempted. Single impact of taking funds from relative is that any rental income arises from that property is taxablr in hands of his wife i.e. E.

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