Disclaimer: Information provided is for general knowledge only and should not be deemed to be professional advice. For professional advice kindly consult a professional accountant, immigration advisor or the Indian consulate. Rules and regulations do change from time to time. Please note that in case of any variation between what has been stated on this website and the relevant Act, Rules, Regulations, Policy Statements etc. the latter shall prevail. © Copyright 2006 Nriinformation.com
NRI
Information by Virendar Chand
NRI Information for OCIs - PIOs on PAN Cards, OCI, Visas, Property, Immigration, Customs Duties & more
next previous

Tax on Gifted Property

Currently, there is not gift tax in India. The Gift Tax Act, 1958 was repealed with effect from 1st October, 1998. There are however certain guidelines when it comes to giving gifts and taxation that non-residents should be aware of. There is no tax liability if gifts are between relatives. The definition of a relative is provided in section 56 clause (vi) of sub- section (2) of the I-T Act.  For a gift of property in India to be tax free, the relative should be the individuals: 1. Spouse; 2. Brother or Sister; 3. Brother or sister of either spouse; 4. Brother or sister of either parents of the individual; or 5. Any hereditary ascendant of either spouse.

When is gifted property taxed in India?

Gifts over Rs. 50,000, received from people who are not considered as relatives are taxed. Normally the person receiving the gift is required to pay taxes on such gifts. Since we are talking of property gifts here, the fair market value of the gifted property is considered the amount to have been gifted.  While there is a limit of Rs. 50,000 for gifts to non-relatives, there is no limit when gifts are given to relatives. They would be tax free. NRIs can gift any amount to a person who qualifies as a relative and such gifts would be tax free. 

Gift of money to cover black money

NRIs should exercise care if they are asked to give gift cheques to resident Indians in exchange of cash money. This is normally done in an effort to turn black money around. Such transactions though they appear to be harmless, are illegal. Example:  Sonia, a person of Indian origin, while visiting India is asked to give a cheque of Rs. 50,000 to an Indian resident, who would pay her Rs.60, 000 in cash. While Sonia may not be aware of it, she is breaking the law. The tax authorities are aware of such schemes where residents try to turn black money that they cannot account for, as money given to them as a gift. NRIs should naturally refrain from such activities, as they are illegal and can result in problems and penalties. When gifts are given, be aware that proper documentation is required to prove the gifts received are genuine, and the gift giver has the capacity to give such gifts.

Wealth tax on gifted property in India

While there is no tax on gifts between relatives, in the event a house is gifted to a relative, even though there is no gift tax applicable, there is a possibility that wealth tax may apply. Wealth tax applies if a person's net worth exceeds Rs. 30 lakh. Net worth is calculated by taking all your assets into account less any loans taken to acquire those assets.
Next Page    Wealth tax in India  Information for Non-Residents  . . . click to read now
Custom Search
Search Nri Information
twitter  Follow us on

Wealth Tax in India Abolished

Indian Finance Minister Mr. Arun Jaitley on February 28, 2015 while announcing Budget 2015 stated that wealth tax has been completely removed from the financial year 2015-2016 onwards.
New!

Tax on Gifted Property

Currently, there is not gift tax in India. The Gift Tax Act, 1958 was repealed with effect from 1st October, 1998. There are however certain guidelines when it comes to giving gifts and taxation that non-residents should be aware of. There is no tax liability if gifts are between relatives. The definition of a relative is provided in section 56 clause (vi) of sub-section (2) of the I-T Act.  For a gift of property in India to be tax free, the relative should be the individuals: 1. Spouse; 2. Brother or Sister; 3. Brother or sister of either spouse; 4. Brother or sister of either parents of the individual; or 5. Any hereditary ascendant of either spouse.

When is gifted property taxed in

India?

Gifts over Rs. 50,000, received from people who are not considered as relatives are taxed. Normally the person receiving the gift is required to pay taxes on such gifts. Since we are talking of property gifts here, the fair market value of the gifted property is considered the amount to have been gifted.  While there is a limit of Rs. 50,000 for gifts to non- relatives, there is no limit when gifts are given to relatives. They would be tax free. NRIs can gift any amount to a person who qualifies as a relative and such gifts would be tax free.  Gift of money to cover black money NRIs should exercise care if they are asked to give gift cheques to resident Indians in exchange of cash money. This is normally done in an effort to turn black money around. Such transactions though they appear to be harmless, are illegal. Example:  Sonia, a person of Indian origin, while visiting India is asked to give a cheque of Rs. 50,000 to an Indian resident, who would pay her Rs.60, 000 in cash. While Sonia may not be aware of it, she is breaking the law. The tax authorities are aware of such schemes where residents try to turn black money that they cannot account for, as money given to them as a gift. NRIs should naturally refrain from such activities, as they are illegal and can result in problems and penalties. When gifts are given, be aware that proper documentation is required to prove the gifts received are genuine, and the gift giver has the capacity to give such gifts.

Wealth tax on gifted property in

India

While there is no tax on gifts between relatives, in the event a house is gifted to a relative, even though there is no gift tax applicable, there is a possibility that wealth tax may apply. Wealth tax applies if a person's net worth exceeds Rs. 30 lakh. Net worth is calculated by taking all your assets into account less any loans taken to acquire those assets. Next Page: Wealth tax in India  Information for Non-Residents  . . . click to read now >>
N
RI Information
 Informing  educating and connecting Indians across the globe
next next previous previous
twitter  Follow us on N RI

Wealth Tax in India Abolished

Indian Finance Minister Mr. Arun Jaitley on February 28, 2015 while announcing Budget 2015 stated that wealth tax has been completely removed from the financial year 2015-2016 onwards.
New!