Sidhick

Hello Sidhick,

As per Section 47(iii), "any transfer of a capital asset under a gift or will" is not to be regarded as transfer, and hence does not attract Capital Gain provisions. Therefore, there is not tax liability on your behalf.

Further, as laid out in section 56(2), the same capital asset (an immovable property) is provided as exempted from tax in the hands of the receiver if the same was received as gift from a relative. Therefore, no taxation for the son as well.

The rental income, however, shall be chargable under Income from House Property.

Also, it is recommended for you to execute a gift deed.

Hope this was of help.

Ansari Salman
KPPM & Associates

I thank you very much to M/s KPPM &amp associates for the reply.  I have one more query that whether I have to reply for this notice.  If so, is it necessary to attach the copy of settlement/gift deed in the reply. Sir, Please suggest

Yes, it is recommended to reply to the notice, since in case of non-response, the Assessing Officer may adopt whatever course of action he considers appropriate (such course is usually mentioned in the notice).

And yes,

- With the response, attach the documents related to such transfer
- In the response, disclose the nature of the transaction to help clarify its exemption