A gift means the transfer by one person to another of any existing movable or immovable
property, made voluntarily, without consideration in money or money's worth. It includes a
transfer or conversion of any property which is "deemed" to be a gift.
Gift tax is levied for every assessment year, in respect of the aggregate value of gifts
made by a person during the previous year.The basic exemption available for deduction
during a previous year from the assessment year 1995-96 is Rs 30,000.
Gift tax is chargeable on taxable gifts at the rate of 30 per cent on the market value of
the property, movable and/or immovable, gifted during the year. However, if the tax is
paid within 15 days of gifting, the rate of gift tax after providing advance tax rebate
would be 27 per cent of the gifted amount in excess of Rs 30,000.
Gift tax in India continues to be payable by the donor. If, for any reason, it cannot be
recovered from him, then it can be recovered from the donee.
If a person receives property as gift through a Will, there is no liability to gift tax,
as it can be effectively received only after the death of the person making the Will.
Gifts of immovable property, situated outside the territory to which Gift Tax applies
(i.e. properties situated outside India, or in the state of Jammu & Kashmir) are
exempt from gift tax.
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