Partnership firm

As per Income tax act,

Relatives means

– Spouse of Individual

– Brother & Sister of Individual

– Brother & Sister of Spouse of Individual

– Brother & Sister of either of the parents of Individual

– Any Lineal ascendants or descendants of the individual

-Any Lineal ascendants or descendants of the spouse of the individual. 

So, Grand father covers in Any Lineal ascendants or descendants of the individual.

That part of share in partnership firm as gift is Not Taxable. 

It is non-taxable in hands of grandson as well as grandfather for reasons mentioned by Mr. Reddy

It is advisable to execute a gift deed mentioning the facts as it will be helpful in case any query is raised by the department susequently.

Regards

CA Shivani Mittal

The meaning of Property under Gift tax 

• Immovable Property being land or Building or both
• Shares and Securities
• Jewellery
• Archaeological Collections
• Drawings
• Paintings
• Sculptures
• Any other work of Art

Tax on Property received as Gift would only be levied in case of the above mentioned properties. Thus, in case any property is not listed above, tax on those properties received as gift would not be levied. Examples of such properties on which gift tax would not be levied are Cars, Laptops, and Mobiles etc....

If business share received by non relative also then it will not be taxable....because it will not qualify for property definition under gift tax...