• Tax on property that is to be gifted

My father is giving a property to my aunt by a gift deed. Will my father have to pay tax for that property even though he doesn't enjoy the benefits of that property?Will that tax be passed onto me as well after his demise and as long the property is in my aunts name?
Asked 2 years ago in Income Tax from Hyderabad, Telangana
In your case we shall know the relation of your Aunt to your father. 

In following cases, gift of immovable property will not be charged to tax.
1) Property received from relatives.
Relative for this purpose means:
i. In case of an Individual
a. Spouse of the individual;
b. Brother or sister of the individual;
c. Brother or sister of the spouse of the individual;
d. Brother or sister of either of the parents of the individual;
e. Any lineal ascendant or descendent of the individual;
f. Any lineal ascendant or descendent of the spouse of the individual;
g. Spouse of the persons referred to in (b) to (f). 

Gifts (i.e. immovable property received without consideration) received from relatives
are not charged to tax(meaning of relative has been discussed earlier). Friend is not a
relative as defined in the above list and hence, gift received from friends will be charged
to tax (if other criteria of taxing gift are satisfied).

If the above conditions of gift are satisfied your father need not pay tax. The tax will not pass on to you if the above conditions are satisfied.
Shyam Sunder Modani
CA, Hyderabad
1408 Answers
95 Consultations

5.0 on 5.0

Dear Sir,

Neither your father nor you is liable for any taxes to be paid on that property. Your aunt who is the beneficiary in this case will have to bear the registration charges now and also the Capital Gain Tax whenever she sells the property.

Trust this clarifies your query. 

Feel free to get back/ call back for any further clarifications. 

Thanking You. 

Rohit R Sharma
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

Dear Sir,

Neither you nor your father need to pay any taxes on gifting this property to your aunt. Your aunt will pay the taxes on income received from this property.

Please let me know if you need any further assistance on the above.

Thanks and Regards
CA Abhishek Dugar
Abhishek Dugar
CA, Mumbai
2944 Answers
125 Consultations

5.0 on 5.0

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