Tax liability in case of Donation and Gift of deceased brother property

[Tikam Gupta]

Dear Sir/Madam

My friend is 3 brothers and 2 sisters. During COVID-19 one brother's family (individual, his wife, and child) got expired. The deceased person had some movable and immovable property. Now my friend and his brother and sisters want to donate/gift this property to some needy/ poor person and he wants to clear some points.

1. How can they donate this movable and immovable property as it is not in their name. What they should do.

2. What would be the tax liability on them and the receiver of the person during donation/gift of deceased person property.

Is there would be any changes if they donate a deceased person's property to some financially weak distant relatives.

Please support him with share your valuable advice.

Regards

Tikam

[DR.MARIAPPAN GOVINDARAJAN]

Donation cannot be done straightaway. The said properties are to be transferred to you by establishing that you are the legal heir. After the title is transferred to you then you can donate the same to others.

[ARVIND JAIN]

Can not say about direct transfer to the needy person but if it happens either directly or indirectly where the relationship can not be explained then the receiver will have to bear at least Income tax on the stamp duty ready reckoner value of the properties as per the provision of Income Tax act - Refer Sec 56 of the Act. Some people do gifting to trust but with due care of following relevant provisions of the state stamp act and other documentation.

AI Summary

Gift taxation: recipients may face income tax on stamp duty valuation when relationship to the deceased is unexplained. Heirs must first establish legal heir status and obtain transfer of movable and immovable property into their names before donating it; thereafter donation is permissible. Recipients may face income tax under the Income Tax Act (Section 56) on the stamp duty ready reckoner value where the relationship or source is unexplained. Use of trusts for gifting is possible but requires compliance with state stamp laws and proper documentation.