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Tax implication -gift of residential property

Naveen Kumar Jain (Chartered Accountant) (640 Points)

06 June 2014

A owns a flat and transfers it to his mother-in-law by means of a gift deed. The gift deed is registered and property transfer is also registered and due stamp duty is paid. Are there any tax implications of this transaction for A? Is any LTCG deemed to accrue to him on this transfer? Is he required to indicate this transaction in his ITR2? There is no column in the House Property portion of ITR to indicate this transaction. Has he to mention it in CG portion any where? What is the tax implication for Mother-in-law? Please give your views.

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3 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 06 June 2014

There is no tax payable either for Mr. A or his mother-in-law. LTCG will arise in the hands of mother-in-law when she decides to sell this flat.

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CA Saurabh Khatri (Business) (73 Points)
Replied 06 June 2014

Yes, Mr. Mihir is right, there is no clubbing of Income as mother-in- Law is not relative as per the clubbing of Income rules. So, A wouldn't liable for taxes on further income that arises on the said property.

subhash kumar jha (PROFESSION) (445 Points)
Replied 06 June 2014

there are not any tax implications of this transaction for A. No LTCG deemed to accrue to him on this transfer. He doesn't required to indicate this transaction in his ITR2 as There is no column in the House Property portion of ITR to indicate this transaction. he will not have to mention it in CG portion any where. tax implication for Mother-in-law will arise when she will sell property. Mother in law can show this this transaction in ITR in EI sheet as Gift of Immovable property from relative.