O^^€ Q Menu ▼ Consider These Points Before Gifting a Property ©March 26, 2018 &Real Estate # gifting a house to a family member, gifting property, gifting property to children, gifting property to family member, gifting property to son,gifting property within a family,house gifts 1 Srishti Chandola lh Like 0 The joy of gifting is enormous. But, there could be some financial implications of doing so, especially if you plan to gift someone a property. Here are specific points that must consider before you actually decide to confer upon yet another owner of the property through a gift deed. Do I need to pay taxes if I gift the property to a relative? The answer is no. None of you (you and the relative you are gifting) will be liable to pay the taxes in the case the transfer takes place through the gift deed. You will, however, have to pay the stamp duty as well as the registration charges on the transaction to give it legal validity. But, if you plan to transfer the property which has the value of over Rs 50,000 to someone who isn't your relative, the recipient will provide to pay the taxes since the financial year under the head income from other sources. What if you want to gift cash gained from property sale? In such cases, the recipient might actually have to pay the taxes if he or she isn't your relative. Under tax law, if one gets the gift worth Rs 50,000 in a financial year, one will be liable to pay the taxes under the head income from other sources. If proceeds are transferred to, say, son's account, he won't be liable to pay any taxes. What if you gift assets during a lifetime? In case, you have parted ways with the assets through registered gift deed, the change of the ownership takes place after immediately. A gift deed becomes binding lawfully after it has been registered giving the stamp duty for the transaction during the lifetime and witnesses have arrested it. As per the provisions of Registration Act, 1908, the donor must get the registering of deed within 4 months of executing the same. If you thought the gift deed transferred the property to say, an NGO, it immediately can claim the ownership of the property.
Can you take the gift back? The answer is yes, but here is the caveat. As per the Section 12 of T ransfer of Property Act, 1982, unless the donor specifies in the registered contract that keeps him a right to take back the gift, revoking deals won’t be possible. Also, you could keep partial rights over the gift. For example, you transfer the gift deed two plots to the distant relative at the same time keeping the right to revoke transfer over the second plot. At a later stage, you won’t be able to claim the ownership over the prime plot. What if you want to gift property after demise? Irrespective of willingness to gift the assets, you may not like necessarily to part the ways with it during the lifetime to make sure that transfer must be done through a will, not a gift deed. When you create the will, you have the liberty to make the changes in it as and when they deem fit, something you don’t enjoy if the property transfer has actually taken place through the gift deed. Who pays dues after the property is gifted? Under the provisions of the property transfer the law, after the asset is completely conferred upon the new person through the gift deed, the recipient of the gift will actually be liable to pay the pending dues. Suppose your uncle gifted the flat, for which he is liable to pay Rs 50,000 as the electricity, water and utility bills. The responsibility of paying the dues rests with you. Do you still pay a stamp duty if you gift assets to charitable trust? Depending on prevailing the law in the state and the manner in which deed is generated, the stamp duty might actually be waived or reduced if you gift assets to the charitable organization. However, in case, you gift the property to non-governmental organization (NGO), you won’t have to pay the stamp duty. Keep in mind that not all the NGOs are permitted to accept the gifts of property and land. Can you gift the property that you expected to own in the future? Such a contract, if it is made, is termed void as per the law. What is recipient doesn’t accept the gift? To make the gift deed valid legally, the beneficiary has to actually accept it in the lifetime of the donor. In case, he does fail to do so, the contract would turn the void and ownership of property would lie with the donor. ^ Use of Provident Fund to Purchase a Property Leave a Reply Your email address will not be published. Required fields are marked * Comment Name
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