12 January 2014
My friend intends to gift one of his house property to his son. He likes to know the tax implications under Gift tax act and under income tax for him as well as for his son.Pl clarify.The value of the house property is more than Rs.50000/=
12 January 2014
Gift to son does not attract any gift or income tax. By a settlement deed the property can be settled without any tax implication.
But please advise your friend not to gift the property to his son, however affectionate or reliable he may be as on date. Advise him to retain life estate till his life time and transfer absolute ownership after his death.
Advise him to gift the property by a SETTLEMENT WITH RESERVATION DEED whereby, property is gifted immediately subject to reservation of life estate of the settlor.
Please note that as per Income tax Act, gift or settlement to son does not fall under the definition of the word TRANSFER. Hence whether the value of the property is 50,000 or 50 lacs or more doesn't matter.
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