INTERVIEW QUESTIONS TAX GIFT TAX DETAILS

Question: Classification of Gift and Gift Tax rates?

Answer: The following items received by individuals and HUF may or may not be subject to gift tax, depending on the basic value clause and exemption categories:-

Gift receipts of Rs 50000 or lower each year

Any assets or money received as a gift is valued at Rs 50000 or below in a year, it is considered as tax-free gift. If you receive two or three gifts (other the exempted gifts), the total amount has to be fifty thousand or lower.

Gift receipts of more than Rs 50000 each year

Assets that are valued above Rs 50000 will be considered taxable for the entire amount, unless tax exemption rules apply to such gifts.

Immovable property – If the stamp duty value (SDV) of the gifted property exceeds Rs 50000, the entire value is taken as taxable income. If you’ve made part payment, then the balance of (SDV – Payment) will be taxable.

Movable Property – If the fair market value (FMV) of the asset is estimated to be more than Rs 50000, the entire value is taken as taxable income. Here again, where part payment has been made by you, the balance of (FMV – Payment) will be taxable income.

GIFT TAX RATES:-

The cash or cheque amount, stamp duty value of property and estimated value of other assets will be chargeable as income.
You will have to report gift value under income from other sources.
This gift income will be taxed along with your total income under the tax slab rates applicable to you in that financial year.

The following items received by individuals and HUF may or may not be subject to gift tax, depending on the basic value clause and exemption categories:-

Gift receipts of Rs 50000 or lower each year

Any assets or money received as a gift is valued at Rs 50000 or below in a year, it is considered as tax-free gift. If you receive two or three gifts (other the exempted gifts), the total amount has to be fifty thousand or lower.

Gift receipts of more than Rs 50000 each year

Assets that are valued above Rs 50000 will be considered taxable for the entire amount, unless tax exemption rules apply to such gifts.

Immovable property – If the stamp duty value (SDV) of the gifted property exceeds Rs 50000, the entire value is taken as taxable income. If you’ve made part payment, then the balance of (SDV – Payment) will be taxable.

Movable Property – If the fair market value (FMV) of the asset is estimated to be more than Rs 50000, the entire value is taken as taxable income. Here again, where part payment has been made by you, the balance of (FMV – Payment) will be taxable income.

GIFT TAX RATES:-

The cash or cheque amount, stamp duty value of property and estimated value of other assets will be chargeable as income.
You will have to report gift value under income from other sources.
This gift income will be taxed along with your total income under the tax slab rates applicable to you in that financial year. Source: CoolInterview.com

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