31 July 2010
There are two properties. One is owned by Mr.A and the other by Mr.B. A and B are uncle and nephew (real brother's son). They want to exchange these properties with each other.
Kindly advise about the tax planning. Whether gift to each other is a better option? I am of the view that no tax would be leviable bcoz A and B are relatives. Further I am of the view that there will be no capital gain tax bcoz the transaction will be in the nature of gift. Whether A and B will be covered by definition of relative u/s 56 of the I.T. Act.