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Gift given by relative !

Venkat (NA) (76 Points)

12 October 2021

Hi !

When gift being immovable property is given by specified relative being donor to donee, the ownership is also transferred by donor , then how come income generated from that immovable property by donee clubbed to the donors income ?

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10 Replies

CA Raj Doshi (Practising CA) (8924 Points)
Replied 13 October 2021

Clubbing happens when the donee is the spouse or the son's wife and the transaction is done otherwise than for adequate transaction.

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CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 13 October 2021

It will be clubbed under donor's hands

Venkat (NA) (76 Points)
Replied 13 October 2021

Hi !

Thanks ! So you mean that , if the said Txn is bw relations other than stated by you above , then the income generated from the gift will not be clubbed with the donors income. Pl correct me if I'm wrong.

Venkat (NA) (76 Points)
Replied 13 October 2021

Hi !

Venkat (NA) (76 Points)
Replied 13 October 2021

Hi ! Thanks ! So you mean that , if the said Txn is bw relations other than stated by you above , then the income generated from the gift will not be clubbed with the donors income. Pl correct me if I'm wrong.

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CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 17 October 2021

Transactions between relatives are exempt

vijayakumar (proprietor) (172 Points)
Replied 21 October 2021

Learned gentle men ,

Thank you very much for all your efforts & valuble time . My query is -I have a (self earned ) plot which I bought in 2002 for 5 lac. A small portion of this I want to transfer as a gift to my employee who was with me for 40 years with out any consideration. The govt value of this plot is 70 lac . Is there any tax for the employee . I do not want any problem for him as he is not educated.. Pl help me.

vijayakumar

Venkat (NA) (76 Points)
Replied 22 October 2021

Hi !

Yes it's fully taxable if the stamp duty value exceeds ₹ 50,000/- for the piece of land gifted without consideration. Moreover PAN is mandatory for registeration of land in the employees name.

vijayakumar (proprietor) (172 Points)
Replied 22 October 2021

Respected sir,

Pl - my reasoning is like this .

Income tax= the tax on your actual income, .( the provident fund contribution is not taxed as i have not recd in my hand, ) Gifttax= If I recd any gift in the form of money - it can be treated as an income. Suppose I receive an elephant - as a gift - -how can I be taxed.. if I sell this elephant -receive any amount as money -then the reasoning is correct. On a similar note - employees receive shares -which are paper - & unless it is sold they will not see the money.

In these lines -what this employee receives is a deemed value& until he sells in his lifetime he will not earn any money . Then how he can be taxed.

Venkat (NA) (76 Points)
Replied 22 October 2021

Hi ,

Any immovable property rec'd as gift by donee ( being employee ) from donor ( employer) with no consideration is taxable in the hands of a donee if the stamp duty value of gift exceeds ₹ 50,000/- as is in your case.