Tax Implications On A Gifted Property

Do you know that receiving a property as a gift does not involve any monetary exchange? Even though it doesn’t involve any monetary exchange, the capital gain from the sale of the property is subjected to certain taxes and duties. In real estate gifting a property refers to willingly handing over the ownership rights of the property to someone else. A person or an institution can transfer such a property.

A property which is transferred to someone else as a gift is applicable to stamp duty and registration charges. The property should be registered under sub-registrar under section 17 of the registration act, 1908 and as per the section 123 of the transfer of property act 1882. For the registration process, a gift deed comprising name and details of the donor and recipient is a must.

The tax levied on a gifted property includes

•    Stamp duty and registration charges

The stamp duty and registration charges applicable in the case of a gifted property is the same as in the case of a sale or conveyance deed.

•    Income Tax

The income tax is applicable only when the gifted property is put on sale.

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