Gift Tax Exemptions
Thu, 25 Mar 2010 05:55:07 +0000
Gift Tax Exemption Rules in India are the Good Tax Saving Options
I remember than when I was in School, the gift tax rules in India were very liberal. In fact, people used to save lots of tax by giving gifts to each others on paper. But well, it was the scenario of 80s and 90s. Today the situation is different. Today the Income Tax Exemption is not that much easy as it was years before. But well, still you can save tax on your gifts if you know the information in this Article.
Read this article to know more about the Gift Tax Exemption Rates and Rules in India.
Gifts Received from Relatives -
As per the Income Tax Act, Gifts received from your relatives are 100% Tax Free. The following relations can be your relatives.
- Spouse of the individual
- Brother or sister of the individual
- Brother or sister of the spouse of the individual
- Brother or sister of either of the parents of the individual
- Any lineal ascendant or descendant of the individual
- Any lineal ascendant or descendant of the spouse of the individual,Spouse of the person referred to in clauses (ii) to (vi).
Whether you are received the gifts as Cash, Cheque or any goods. You are not liable to pay the tax for these gifts.
Whenever you get the gift, apply the relation from the above list to get the tax benefits. But well, if your relative is not from the above list than I am sorry, that gift will counted as your Income in that case.
In simple words, if you receive a gift from your blood relations than it is totally Tax Free.
Gifts Received from Non-Relatives -
If you receive a gift from anyone other than the above list, than that gift will be considered as a Gift from Non-relatives. And the limit for such kind of gifts is Maximum Rs.50,000 in case of Cash/Cheque/DD.
This rule doesn’t apply for the assets such as if you receive shares of Reliance Industries as a gift, you are not liable to pay any tax on that. But suppose if you receive a gift from your friend worth Rs.80,000 than you are liable to pay tax on Rs.30,000.
If the gift is received in the form of Cash than and only the upper limit of Rs.50,000 applies. But if the gift has received in the form of Assets than this rule doesn’t apply. And this is the reason I advise you to give Assets (Shares, Gold…etc..) to your friends so that they can save tax on it.
Marriage Gifts -
One very good thing is that, any gift received from any person on the occasion of the marriage of the gift’s recipient would not be liable to income tax. There is no monetary limit attached to this exemption.
Special Tax Exempt gifts
The following list of gifts are fully exempted from Tax whether the it is received as Cash, or any other form of the material doesn’t affect the exemption.
- Gift received under a Will or by way of inheritance
- Gift in contemplation of death of the donor;Gift from any local authority
- Gift from any fund or foundation or university or other educational institution or hospital or any trust or any institution referred to in Section 10(23C)
- Gift from any trust or institution, which is registered as a public charitable trust or institution under Section 12AA
Well, another thing I want to tell you here that, IT people need the proof. So any gift that you want to claim for gift tax exemption, you MUST have a deed with the stamp paper.
A property with an assessed value of USD $50,000 located in a municipality with a tax rate of 43 percent would have a property tax bill of USD $2,150 per year, according to Ballotpedia, a website that specializes in government issues like taxation.
Use of Property Tax Caps
Property tax rates are determined by municipal need. A smaller city or town has a lower rate-- in theory--than a larger one. Municipalities argue that capping or stopping a tax rate increase deprives their budget of funding. There are different types of property tax caps. Rate caps limit on the property tax rate. Assessment caps limit the annual increase in the assessed value of property and total levy caps limit the annual increase in a municipality's total property tax revenue, according to the Center on Budget and Policy Priorities.
The New York State Property Tax Reform Coalition, which is a resource for tax reform groups across New York state, argues that the property taxes there are 40 percent higher than anywhere else in the U.S. and it is making it harder for homeowners and business owners to remain solvent. Property tax caps would limit the amount of property tax revenue that counties, municipalities, or school districts collect.
Land Valuation Issues Internationally
As far back as 2003 The Ukraine has been asking officials to shine a little light on how land is evaluated and then assessed a property tax , according to a legal web site, The Wise Institute of Legal Information and they are not alone. In China, the Ministry of Land Resources was introduced in 2005 on the heels of citizen complaints. The ministry was started to be sure that land was valued fairly and to take a closer look at the evaluation process.
The Illinois Supreme Court ruled recently that an Illinois hospital will loose it's property tax discount because it felt it did not provide enough charitable care to the community.
History of Property Tax and Land Valuation
The Center on Budget and Policy Priorities says historically, property taxes are at an all time low since 1963 if the taxes are calculated as a part of the Gross National Product.
According to the Canadian website BC Assessments, property taxes have always been with us, so to speak. In Canada, wealth was distributed by sharing, gift giving and through potlucks. In 4th century BC, Athens levied taxes on land, houses, cattle, furniture and money.
Tax exemptions for temples and tombs were issues the Egyptians dealt with around 2400 BC. The Roman Empire relied heavily on land taxes.
Resources
- Yahoo News: Illinois High Court Yanks Hospital's Property Tax Break
- Fair Tax Assessment: Companies Help Redetermine Property Taxes
- The Center on Budget and Policy Priorities: Property Tax Caps
