Tax in case of gift vs. relinquishment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 January 2011 There are two ways of gifting a property (to a blood relation/spouse):-
1. as gift (via gift deed)
2. relinquishment of rights (via relinquishment deed)

Cost comparison:-
As I know, gift deed costs more than relinquishment deed. What's the cost of gift deed?
Is it variable based on the value of the property or fixed?

Tax comparison:-
Is there any difference in terms of tax liability (for gift and relinquishment deeds)? There is no tax on gifts from blood relations plus spouse. What about tax in case of relinquishment deed?

Does relinquishment of rights attract capital gains?
* Capital gains will be for the giver (who is relinquishing the rights) or taker (new person who gets the property rights)?
* How can there be capital gain because there is no money given or received?
* What if the relinquishment is done after 3 years period (capital gains rules are different in the new tax rule)?

conclusion:-
Which option, gift or relinquishment, would you suggest to transfer the property? Is this also the most common method used by people? If I am not wrong, gift deed is the most common among the two.

Thanks.

Guest

Guest (Expert)

14 January 2011 So far as provisions of Incometax Act are concerned, gift or relinquishment are same. However, in the Local stamp duty Act, relinquishment should be cheaper.However, as per my best knowledge, relinquishment is generally made in the case of joint property.