Save tax by gifting your property?! | Aditya Sharma

Описание: Under Section 56(2) of the Income Tax Act, gifts such as property, shares, or cash are tax-free only when received from specific “relatives” — like parents, siblings, spouse, or children. If the same gift is received from a friend, girlfriend, or unrelated person, the entire value may be treated as income and taxed accordingly.

This distinction creates a smart tax-saving opportunity: transferring income-generating assets like rental property to a family member in a lower tax bracket. The income from that asset is then taxed in their hands, not yours — reducing the overall family tax burden legally.

Proper planning and documentation are essential to ensure compliance and avoid clubbing provisions, which may apply in some cases (e.g., gifting to a spouse or minor child).

Understanding who qualifies as a “relative” and how income is taxed post-gifting can help families legally optimize their tax strategy and preserve wealth across generations.

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