Ans.

As per provisions of the Act, any sum of money/ property which is received without consideration or for an inadequate consideration by any person shall be chargeable to tax in the hands of the recipient subject to certain exceptions as specified in the below FAQs.

It may be of relevance to note that transfer of funds as Gift by Non-Resident (NR) to a Resident /NR and vice versa may attract taxes. Accordingly, a person should examine the taxability of such a transaction prior to entering the same.

Ans.

Property has been defined to mean the following assets:

i.     Immovable Property being Land or Building or both

ii.    Property other than immovable property i.e. Movable Property being:

·         Shares and Securities

·         Jewellery

·         Bullion

·         Archaeological collection

·         Drawings

·         Paintings

·         Sculptures

·         Any work of art

Ans.

Gifts received from a person are chargeable to tax in the hands of recipient and the provisions relating to taxation of said gifts are tabulated below:

#Refers to Aggregate value of gifts received during the year

*Value adopted by stamp duty authority for the purpose of stamp duty

** As per Finance Act, 2020.

***Value is to be determined as per Rules prescribed for the purpose of calculating

        FMV for each property

Ans.

     i.        For Shares and Securities

·         Quoted shares – price recorded on the stock exchange

·         Unquoted shares – value of such shares is to be computed as per prescribed rules.

    ii.        For Other capital assets:

Other capital assets such as Jewellery, Bullion, Archaeological collection, Drawings, Paintings, Sculptures and any work of art - value of such asset shall be the price it would fetch in the open market

Ans.

Stamp duty value prevailing on the date of Registration of the immovable property has to be considered.

In case where the date of Agreement and date of Registration of the said Agreement are not the same, the Stamp duty value as on the date of Agreement has to be considered, provided the following conditions are satisfied.

The amount of Sale consideration or part thereof, has been paid by any of the below modes on or before the date of Agreement for transfer of such Immovable Property.

·         an account payee cheque; or

·         account payee bank draft; or

·         use of electronic clearing system through a bank account; or

·         through such other electronic modes as may be prescribed 

Ans.

As the date of agreement and date of registration are not same, stamp duty value as on date of agreement i.e. as on 5^th January 2003 has to be considered, as the part of the consideration i.e. Rs 50 lakhs out of Rs 2 crores has been paid through recognized mode of payment.

Ans.

Yes, the answer would change, as Mr. A has paid partially in cash, the stamp duty value as on date of registration i.e.,29^th July, 2023 will have to be considered.

Ans.

The Gifts received by the recipient shall not be taxed if the said gift is received:

         i.  From a relative (refer FAQ 9. for meaning of relative); or

         ii.  On the occasion of marriage of the individual; or

        iii.  Under a WILL or by way of inheritance; or

        iv.  In contemplation of death of the payer; or

         v.  Received from local authority or

        vi.  From an individual by a trust created or established solely for the benefit of relative of the individual or

       vii.  From any fund or foundation or university or other educational institution or hospital or other medical institution; or

      viii.  From or by any specified trust or institution; or

       ix.  From such class of persons and subject to such conditions, as may be prescribed (As per amendment in Finance Act, 2019); or

        x.  By an individual from any person, in respect of any expenditure actually incurred by him on his medical treatment or treatment of any member of his family (refer FAQ10. for meaning of family) for any illness related to COVID-19 subject to certain conditions as prescribed by Central Government (As per amendment in Finance Act, 2022); or 

        xi.  By a member of the family of a deceased person from the employer of the deceased (no limit) or from any other person/s to the extent of Es. 10 lakhs in aggregate where the cause of death is illness related to COVID-19 and payment is received within 12 months from the date of death of such person and subject to any other conditions as prescribed by the Central Government (As per amendment in Finance Act, 2022)

Ans.

·         In case of an Individual:

          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);

·       In case of a HUF:

Any Member thereof

Ans.

Family means

1. Spouse
2. Children of individual
3. Parents/ Brother /sister of individual wholly or mainly dependent on the individual.

Ans.

Gift received by a person (which are chargeable to tax) are taxed under the head “Income from Other Sources” at slab rate applicable to such person (highest being 30% plus applicable surcharge and Cess of 4%).

Ans.

Gift of any sum of money on or after 5th day of July 2019, by a person resident in India to a NR in his overseas bank account  (not being a gift which are not chargeable to tax as mentioned in FAQ 8 in excess of Rs 50,000 ), , shall be taxed in India.

Further, gift of any sum of money on or after 1^st day of April 2023, by a person resident in India to a RNOR in his overseas bank account  (not being a gift which are not chargeable to tax as mentioned in FAQ 8 in excess of Rs 50,000, , shall also be taxed in India.

Consequent to above, the person giving gift to such a NR shall be liable to withhold tax at source (TDS) at the highest rate applicable i.e. 30% on the amount of gift made to the NR.

Ans.

No. Since the Gift is received from his lineal ascendant, that is, a relative, there will be no tax implication in the hands of NR.

Ans.

No. Since the Gift is received on contemplation of death of the neighbour, there will be no tax implication in the hands of NR.

Ans.

Yes. Receipt of such gift of Rs. 5,00,000/- will be taxable in NR’s hands.

Further, the NR’s friend is liable to deduct TDS at the rate of 30% on Rs. 5,00,000/-.

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When an individual purchases an immovable property i.e. it receives the said immovable property and the consideration paid for purchase of property is less than the Stamp duty Value of the property, then the said benefit is deemed as Income and subject to tax provided the conditions hereinunder are satisfied:

if an individual receives an immovable property and the difference between Stamp duty value and consideration, is higher of following amounts Rs 50,000 and 10% of consideration, then the excess of Stamp duty value over the consideration shall be charged to tax under the head ‘Income from Other Sources’ in the hands of NR.

In the present case, Stamp duty value exceeds the actual consideration by Rs.2,80,000/-(Rs. 27,00,000/- less Rs. 24,20,000/-), which is higher than Rs. 50,000/- and 10% of the actual consideration of Rs. 24,20,000/- i.e. Rs. 2,42,000/-. Accordingly, the difference of Rs. 2,80,000/- shall be treated as income of NR.

However, the said individual has the option to object the determination of value of the property alongwith supporting documents substantiating the consideration being less than the stamp duty value of the property and its acceptance is at the sole discretion of Income-tax officer.

Ans.

The difference between actual consideration and Stamp duty value is of Rs. 1,00,000/- (Rs. 27,00,000 less Rs. 26,00,000), which is higher than Rs. 50,000/-, but it does not satisfy the other condition i.e. difference between Stamp duty value and consideration should be more than 10% of consideration of Rs. 26,00,000/- i.e. Rs. 2,60,000/-. Accordingly, said difference of Rs. 1,00,000/- shall not be considered as income in the hands of NR.

                                                                                                                                                               Updated  November 2023