Hello
I am a widow with no legal heir. I have gifted my house which is in my name (worth 1.5 cr) to my niece's minor son vide a gift deed.and made my niece and her husband as guardians. I have paid stamp fee and court fee. What would be tax liability to either of us? Since my niece's son is minor, I don't think there will be any tax liability for him. The said property was purchased in my name by my husband.
Thanks
there is no taxability in this case.
Thank you for replying
Gift of a house to a niece's minor son:
• A niece's son (grand-nephew) isn't a "relative" under Sec 56(2)(x). So the gift is taxable in the recipient's hands (the minor) as Other Sources, on the stamp duty value of the house (Rs 1.5 crore), if above Rs 50,000.
• Clubbing: since the minor's income (from a gift by a non-parent) is clubbed with the parent's income (Sec 64(1A)), the parent with higher income pays tax on the Rs 1.5 crore gift (Other Sources), at slab rates. That's a large tax.
• Alternative: a will (bequest) instead of a gift. Inheritance under a will is exempt (Sec 56(2)(x) proviso (V)). The property passes on your death, without tax.
• If the gift is already registered, the tax liability arises in the year of the gift.
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