Greeting,
Any sum of money received from a relative is tax free however rule states that there must be supporting Gift deed . My query is that should the gift deed be registered, or mere signature of donor & donne is enough with supporting witnesses.Is there any format which should be followed for drafting a gift deed.
1. Yes, any gift in the form of cash or in the form of immovable property will not be subject to tax if the same is between relative as per sec 56(2)(x) of the act.
2. However, if the gift is in the nature of immovable property in order to make it leagl gift deed needs to be executed. For that, a proper agreement should be prepared and registration should be done in the name of the transferee. Stamp duty charges are payable according to the law of the state in which the registration is done.
3. Registration of property is a must through proper agreement. Other than immovable property normal gift deed (regular agreement like rental agreement) is enough.
Please correct me if the above solution has an alternative view.
CAclubindia
