You may have to pay tax at home found in gift
Meeting in a house or property gift is often the way to show the love and belonging of relationships. But do you know that such a gift can sometimes put in income tax mess? According to the Income Tax Act, 1961, if you get any real estate (such as land, house or flat) in a gift, then you may have to pay tax on it in certain circumstances. That is, the house found in the gift is not always tax free. Let us understand in detail that in which cases the property found in the gift has to be taxed, and in which cases not.
When not tax is not taxed?
If you have got a house, land or flat gift, then it is not necessary that you have to pay income tax on it. In some special circumstances, such a gift is completely tax free.
If you meet a relative, you do not have to pay tax
If this property has been given to you by a close relative of you, then it is not usually taxed. The Income Tax law states who are “relatives”. This includes your husband or wife, your children, parents, siblings, grandparents, granddaughters and even in-laws like mother-in-law, sister-in-law. If any of these gifts you home, then you will not be taxed from you.
Tax free even if you have been found on the occasion of marriage
If you have found a house or property gift at the time of marriage, then it is also considered tax free. Whether anyone gives a gift – whether a relative or friend, it does not tax.
No tax even if found in will or succession
If someone has given you a house through your will, or after someone’s death you have got a property as succession, then it will not be taxed.
Gift received from a trust or charitable institution
If you have received a property from a religious or charitable trust, then it can also be tax free under certain conditions. However, it has some rules, which may be different in every case.
In which cases do you have to pay tax?
Now we have known that in some special circumstances, the house found in the gift is tax free. But if someone else has given this gift relative, then the matter changes.
Got a house from a friend, you have to pay tax
If you have gifted a house, land or flat by your friend, then be careful. According to income tax rules, a friend is not considered a relative. Therefore, if a property has been received from a friend, then you will have to pay tax on it.
The government sees how much the price of that gift is. If the government stamp duty price of that property is more than ₹ 50,000, then the entire amount will be considered your income. And this income will be added to your income tax return in the name of income from other sources. Then the more tax is made, the more tax will have to be paid.
Understand the example, suppose a person gifted a flat worth ₹ 9 lakh to a person. So that entire ₹ 9 lakh will be considered as the income of that person. It will not happen that only above ₹ 50,000 is taxable. No. Here the entire amount of ₹ 9 lakh will be taxed.
This will be taxed on property given to wife or daughter -in -law
If a person gifts his name property without taking money to his wife or daughter -in -law, then this transaction is tax free, but if there is an income from that property, such as the fare is not the woman, not the woman, but to the person who had gifted. In simple language, even if the house is now in the name of wife or daughter -in -law, but only tax is to be paid by the husband or father -in -law.
This is called “clubbing” in the tax world. That is, adding income to the name of the real owner. This rule comes under Section 64 of the Tax Act, which clearly says that whatever will be earned from the property given to the wife or daughter -in -law will be taxed in the name of the person who gave the property.
Even if a gift given to a minor child will be taxed
If you have given a house, land or flat gift to your minor son or daughter, then the rule of “clubbing” will also apply here. This means that if there is any income from that property such as rent or interest, then its tax will be added not in the child’s name but in the name of mother or father. This rule comes under section 64 (1A). The government believes that the income of the child will actually be considered the income of its parents.