Real estate gift from resident to NRI
This query is : Resolved
26 October 2024
If resident parent gifts real estate to non-resident son, does it trigger any reporting obligation or have any tax implications?
26 October 2024
No gift tax in India, need to check the rules of the resident country of their son.
Compliance : A registered gift deed..
Compliance : A registered gift deed..
26 October 2024
Son will check rules of the resident country. Because there is no gift tax, it is correct to say that there is no need for the son to file NRI tax return in India if his Indian income is below the exemption limit? Also, does the registered gift deed need to be filed with IT or elsewhere?
27 October 2024
1. Always better to file ITR even if Nil return,
2. No, except under Schedule EI of Son's ITR.
2. No, except under Schedule EI of Son's ITR.
27 October 2024
While I get your point that "it is better to file a return", the question is - does the transfer of real estate from mother to NRI son impose any legal obligation on the NRI son to file an ITR in India?
Also, if the son files an NRI tax return with nil income, does he need to mention his foreign country of residence or foreign taxpayer id? The son maintains an Indian address as the family home of parents.
Also, if the son files an NRI tax return with nil income, does he need to mention his foreign country of residence or foreign taxpayer id? The son maintains an Indian address as the family home of parents.
27 October 2024
1. Not mandatory, but because of Real estate transaction query may be raised by ITD, specifically when ITR is not filed.
2. Depends upon the structure of form being released for the relevant AY, some of such general details may get incorporated. Being NRI, as a rule, details of foreign income/s are not asked.
2. Depends upon the structure of form being released for the relevant AY, some of such general details may get incorporated. Being NRI, as a rule, details of foreign income/s are not asked.
27 October 2024
The real estate paid by cheque has been reported on mother's balance sheet for several years. So even if query is raised by ITD, there should not be any issue. From the son's perspective, does the value of the property count towards the 3-lac income threshold that triggers the ITR filing requirement?
27 October 2024
No. It triggers when the Sub-registrar reports the transaction, when the value is Rs. 30 lakhs or more.
27 October 2024
Your answer is self-contradictory and confusing. If the gift does not count towards the 3L threshold as you said, why should it trigger the ITR filing requirement? Because it is a family transfer and not in the nature of sale/purchase, it should not even be reported on AS26/AIS. Even if it is reported, gift from relative is not income and should not count towards the 3L income threshold that makes filing of ITR mandatory.
27 October 2024
I have never said it is mandatory to file ITR, but reporting of the transaction by Sub-registrar to ITD under SFT transaction (provided value is Rs. 30 L or more) triggers query from CPC, if ITR not file. Hence, to avoid any such queries from ITD (specifically if ITR not filled), it is said to be advisable to file it.
As the gift value would be more than 3 lakhs, which is exempt u/s. 56(2)(x) IT act, filling the details under Schedule 'Exempt Income' in ITR, safeguards assessee from litigation.
As the gift value would be more than 3 lakhs, which is exempt u/s. 56(2)(x) IT act, filling the details under Schedule 'Exempt Income' in ITR, safeguards assessee from litigation.
27 October 2024
Thank you for clarifying. I draw your attention to the fact that SFT code 012 is specified as "SFT- 012: Purchase or sale of immovable property". A family transfer from parent to child without any monetary consideration is not a sale/purchase and should be exempt from reporting under SFT-012. Further, real estate is in the state of Haryana which has completely waived stamp duty on such "Family Transfers". Do you think the transfer would be reported under SFT-012? Also, assuming it is reported, can the son provide the AIS information feedback that "Transfer not in the nature of sale", "Receipt not taxable"? See AIS Handbook, Page 43 - https://icmai.in/upload/Taxation/Income_Tax_1403_2022.pdf
27 October 2024
Yes, That will help in the validation of the transaction being reported as exempt in ITR.
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