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Gift tax

RAVICHANDER V.M. (Senior Executive-Finance) (69 Points)

19 May 2016

Dear Sir

I require clarification on gift tax applicability in the below mentioned cases.

1.My friend who is in the US wants to know whether he has to pay gift tax in US if he plans to give a gift deed of a property which is located in Bangalore to his younger brother.

2.Secondly he wants to know whether his younger brother who stays in Bangalore and who is in receipt of a gift deed from him has to pay gift tax.If so what is the rate of gift tax which is payable.

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12 Replies

Hitesh Khanna (Accounting & Finance Taxation Company Law Audit ) (839 Points)
Replied 19 May 2016

Kindly elaborate your query.
Hope you dont want every visitor to write essay on the Posted topic.

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Hitesh Khanna (Accounting & Finance Taxation Company Law Audit ) (839 Points)
Replied 19 May 2016

extremely sorry abt the above comment..

Hitesh Khanna (Accounting & Finance Taxation Company Law Audit ) (839 Points)
Replied 19 May 2016

Any Gift , in cash or in kind from Relatives is exempted from Tax .
Since "brother" falls within the defination of relative, this gift is exempt from tax in the hands of younger brother.
Moreover Tax is not levied on the person who gifts ie the giver.
so neither the younger brother nor the elder brother pay any gift tax.

RAVICHANDER V.M. (Senior Executive-Finance) (69 Points)
Replied 19 May 2016

Thanks for the update.

anil jain (Partner) (1072 Points)
Replied 19 May 2016

The views posted by Mr Hitesh is valid in India as per prevailing rules.

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RAVICHANDER V.M. (Senior Executive-Finance) (69 Points)
Replied 19 May 2016

Dear Anil,

Thanks. i would like to seek further clarifications on the below points :

1. Please let me know under which Section number of the Income tax Act-which mentions that the gift is exempted from tax for my reference.

2.In the above case has the Donor who resides in U.S.A , being the donor of the gift deed please let me know whether he has to pay gift tax to income tax office in India.