Gifts: laws, rules/ India

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This is a collection of articles archived for the excellence of their content.

Gift deed

Can’t be revoked unless right reserved in the deed

May 22, 2023: The Times of India

Bengaluru: Unless the right is reserved, the executant cannot unilaterally revoke the gift deed, the Karnataka HC has said. 
Dismissing two regular second appeals filed by people, who claim to be owners of a land parcel at Chikkajajur village of Holalkere taluk in Chitradurga district of Karnataka, Justice HP Sandesh recently pointed out that only by way of suit, a per son can seek cancellation of the gift and the same has not been done in this case.


JGurushanthappa and other appellants had claimed that their grandfather G Siddappa had gifted certain pieces of land to Sri Th aralabalu Jagadguru Education Society on June 13, 1977, for the construction of a hostel building, which was preferably named after him. A rectification deed was also i ssued in 1980, incorporating the correct survey number. However, on February 20, 1982, aregistered gift cancellation deed was also executed. A will was also executed by G Siddappa, bequea thing the properties, including the land gifted to Tharalabalu Education Society, to hissuccessors. 
After Siddappa’s death in 1988, his family members moved the local court for declara tion and permanent injunction, citing the registered cancellation deed as well as the will executed by their grandfather.

However, the principal civil judge, Holalkere, rejected their claim in 2015. When they appealed against the claim rejection before the senior civil judge, Holalkere, their plea came up only to be dismissed on December 13, 2016. Thereafter, they moved the HC.

They argued that their grandfather wanted the society to construct the hostel for students and to make use of the crops grown in the gifted lands for feeding them and when he found that it was not accomp lished, the gift was cancelled. According to them, this fact was overlooked by bothcourts.

Justice Sandesh noted that there was no condition imposed, except stating that the hostel has to be built and i t should be named after him.

Gift tax

What falls under gift tax?

The Times of India Mar 01 2015

It's true that a separate `Gift Tax Act' doesn't exist anymore. Yet, I-T laws cover specific gifts you receive and their tax consequences. Under the I-T law, any sum of money, movable or immovable property received by you without consideration (without a quid pro quo) is chargeable to tax as `Income from other sources'; even winnings from lotteries, interest income, to name a few, fall under this head.

Exemptions Available

However, certain exemptions are available on this count and not all `gifts' would be taxable.

Gifts from relatives not taxable

Cash, cheques or gifts in kind received from relatives are not taxable. The I-T law has defined `rela tives' elaborately to include your spouse, your maternal or paternal aunts and uncles (and their respective spouses) and your and your spouse's siblings, grandparents, parents, children and grandchildren (and their respective spouses).Gifts received when you get married, or under a will or by way of inheritance are not taxable.

Up To Rs 50,000 not taxable

Cash or gifts in kind (presents) from non-relatives are not taxable up to a value of Rs 50,000 in a year. However, if it is say Rs 60,000, then this entire value of Rs 60,000 is added to your gross total income and you pay tax on it, as per your tax slab. In case you have been gifted immovable property, without any consideration, and the stamp duty value exceeds Rs 50,000 -it is this stamp duty value which will be part of your gross income.However, if you have paid some consideration, but it is still less than the stamp duty value, the difference is added to your income. For presents other than immovable property (say jewellery), the same principle applies except that the fair market value of such a gift is considered. Immovable property denotes landbuildings. Movable property includes: shares & securities, jewellery, bullion, drawings, paintings, sculptures, archaeological collections and works of art.

CAUTION POINT

Gifts from friends received on birthday or marriage anniversary in excess of Rs.50,000 in a year are taxable. Also you should beware of income tax clubbing provisions. For instance, you've gifted your wife -who is a housewife -a cheque of Rs 2 lakh and she earns interest on it, this interest would be clubbed with your income.