What is the tax legal responsibility in respect of flat gifted to daughter by her father?

Question: What is the tax legal responsibility in respect of flat gifted to daughter by her father which is set free? My understanding is that the present won’t be taxable as it’s from a relative, however the rental earnings needs to be taxable. Is this appropriate? If the rental earnings is clubbed within the arms of the daddy, what could be the remedy of capital features on the time of sale when the daddy continues to be alive? – Sujata

Answer: There isn’t any tax legal responsibility for the particular person giving the present. However, the recipient of the items has to incorporate the worth of the identical in his earnings in sure circumstances. Gifts acquired from all of the sources are totally exempt within the arms of the recipient if the mixture worth of all of the items doesn’t exceed fifty thousand rupees in a 12 months. But as soon as the worth of all of the items exceeds the brink restrict of fifty thousand rupees, the complete worth of all of the items develop into taxable with none fundamental exemption. However, the items acquired from sure specified family, together with father is totally exempt with none restrict. So there isn’t a tax legal responsibility both on the daddy or the daughter on the time of present of the flat.

Generally, any earnings which is earned or arises on gifted asset turns into taxable within the arms of the recipient if the recipient is main besides within the instances the place provisions of clubbing of earnings apply. However, in case the daughter is a minor, the provisions of clubbing of earnings will apply and all of the earnings which arises to the minor daughter shall get clubbed with the earnings of the mother or father with greater earnings. There is an exemption of Rs. 1,500/- on the earnings which is to be clubbed with the earnings of the mother or father. The capital features can even develop into taxable within the arms of the daughter if she is main else can be clubbed as mentioned.

Balwant Jain is a tax and funding knowledgeable and may be reached on [email protected]

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