Everything You need to Know about Gifting the Property
Feb 18, 2019 Real Estate News
Want to gift someone property but not sure about how to proceed, we discuss everything you need to know about the gifting of property. Under Section 122 of Transfer of Property Act, ‘gift’ is defined as the transfer of certain existing and immovable property that has been made involuntarily without any consideration from the donor and the recipient.
However, there are certain aspects of the ‘gifting’, one being that the gift must be tangible and the ownership should be transferred to the receiver by the donor.
The relative can be your spouse, sibling of the spouse, sibling, sibling of either parent etc.
If the property received by an individual has the stamp duty value exceeding Rs 50,000, then it is taxable.
To make the gifting more transparent, the papers must be signed by the donor or on behalf of the donor, in the presence of at least two witnesses and duly registered. The stamp duty that is applicable for the property, that differs from state to state, must be paid at the time of registration.
However, there are certain aspects of the ‘gifting’, one being that the gift must be tangible and the ownership should be transferred to the receiver by the donor.
What can be gifted?
You cannot gift the property that you own. However, if you are a Hindu, you may dispose of your self- acquired property. Similarly, if you are a coparcener hen, you may give up your share in the property under certain conditions. If the donor is a widow, then she can gift some of the property she inherited from her husband, but she cannot do so by the will.It is different from the sales deed
In sales deed, one hand over the property in return of money worth the price of the property. In the sales deed, the amount that one pays for the property is settled. But in the case of gifting of the property, there is no money involved. According to the law, you cannot gift your property to the person you are not related to. Government earns revenue through stamp duty and property registration.The relative can be your spouse, sibling of the spouse, sibling, sibling of either parent etc.
Tax liability for gifted properties
The donor is not liable to pay any tax for the property they have given up. But in some cases, the recipient is liable to pay the tax under the ‘income through other sources’ clause under the Income Tax Act 1961. If the property has been received as a gift on the occasion of marriage, inheritance, or from any local authority fund or foundation registered under Section 12AA, it is not liable for any tax.If the property received by an individual has the stamp duty value exceeding Rs 50,000, then it is taxable.
To make the gifting more transparent, the papers must be signed by the donor or on behalf of the donor, in the presence of at least two witnesses and duly registered. The stamp duty that is applicable for the property, that differs from state to state, must be paid at the time of registration.
Looking for property portal?
Related Articles
-
-
-
Things to Know about Home Loan Subsidy under PMAY
Jan 10, 2019 -
For Budget 2020 Government Invites Suggestions
Feb 04, 2020
