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Transfer of flat(immovable property) to relatives

CA.Yeshwant Mehta (President) (147 Points)

06 December 2016

Which relation from the following will be treated as relative under Section 56(2)(vii) of the Income Tax Act, 1961

(i) Gift of Immovable property from Nephew(Sister's son) to Mama(Sister's brother)

(ii) Gift of Immovable property from Nephew(Sister's son) to Mami(Sister's brother's wife)

(iii) Gift of Immovable property from Sister's son to Brother's son (cousins)

Thanks
Yeshwant Mehta
Email: yeshwantmehta @ gmail.com

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18 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (171414 Points)
Replied 06 December 2016

Which relation from the following will be treated as relative under Section 56(2)(vii) of the Income Tax Act, 1961

(i) Gift of Immovable property from Nephew(Sister's son) to Mama(Sister's brother)

(ii) Gift of Immovable property from Nephew(Sister's son) to Mami(Sister's brother's wife)

(iii) Gift of Immovable property from Sister's son to Brother's son (cousins)

Sorry to state None of above.

Eg. Mama/Mami is relative of Bhanja/bhanji, but not otherway round!!!

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Mukesh Kumar (Accounts Manager) (1466 Points)
Replied 06 December 2016

NO EXEPMT FOR ANY RELATIVE US 54

Mukesh Kumar (Accounts Manager) (1466 Points)
Replied 06 December 2016

NO EXEPMT FOR ANY RELATIVE US 56

CA.Yeshwant Mehta (President) (147 Points)
Replied 06 December 2016

Thanks for the quick reply. If gift is from Sister to Brother's wife OR Brother, whether it will be treated from relative ?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (171414 Points)
Replied 07 December 2016

YES.

Relatives u/s 56(2)(vii) from whom Gift is permissible under Income Tax Act, 1961

(i) spouse of the individual;

(ii) brother or sister of the individual;

(iii) brother or sister of the spouse of the individual;

(iv) brother or sister of either of the parents of the individual;

(v) any lineal ascendant or descendant of the individual;

(vi) any lineal ascendant or descendant of the spouse of the individual;

(vii) spouse of the person referred to in clauses (ii) to (vi)

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CA.Yeshwant Mehta (President) (147 Points)
Replied 14 December 2016

Thanks to all. Please clarify the following few questions:

(1) Flat received in gift can be further given as a gift to the relatives. What should be the time gape between two gifts making.

(2) Flat received from Sister by Brother & brother's wife jointly still exempted from IT.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (171414 Points)
Replied 14 December 2016

1. Now you got the point/way correctly. Well, no time bar, only two registration deeds, may be just a day after.

2. Yes. (if both are co-owners)

CA.Yeshwant Mehta (President) (147 Points)
Replied 14 December 2016

Thanks for the quick response, now as per new stamp duty amendement act 2015 stamp duty applicable would be Rs.500/ if transfer of immovable property is within family members.

https://consumerresources.in/2015/05/21/no-stamp-duty-required-for-transfer-of-property-to-relatives/

Weather transfer of residential flat from SON to MOTHER will fall under new stamp act, please clarify

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (171414 Points)
Replied 15 December 2016

First of all this is applied only in the state of Maharashtra.

Secondly, the Article 34 of Stamp act has different sub-sections, wherein if any residential property is gifted by mother to son the stamp duty is 200/ Rs.; but in reverse case it is 2% of FMV.

Read article below for better understanding: https://www.e-stampdutyreadyreckoner.com/Gift.H T M L

CA.Yeshwant Mehta (President) (147 Points)
Replied 18 December 2016

Thanks, If SISTER gifts to BROTHER & BROTHER's WIFE jointly still 2% stamp duty will be applicable.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (171414 Points)
Replied 18 December 2016

Yes...........

CA.Yeshwant Mehta (President) (147 Points)
Replied 27 December 2016

Hello Dhirajlalji,

The following co-ownership gift drafting would be justifiable to claim exempt from IT Act :

" THIS DEED OF GIFT made at Mumbai this day of JANUARY, 2017 BETWEEN Mrs.XYZ (Sister) of Mumbai, aged about … years, Indian Inhabitant presently residing at ----------, hereinafter referred to as DONOR (which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include his heirs, executors and administrators) of the One Part AND (1)Mr. ABC (Brother) (PAN No: ) aged about -- years, Indian Inhabitant, (2) Mrs. DEF (Brother's Wife) (PAN No:AAOPM1416C) aged about -- years, Indian Inhabitant presently residing at -------hereinafter referred to as the DONEES (which expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and include his/her heirs, executors, administrators and assigns) of the Other Part "