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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Income from Other Sources

Mrs. Leela Nair, a resident individual, received a flat from her friend (not a relative) as a gift. The stamp duty value of the flat is Rs 18,00,000. Which statement is correct regarding the taxability of this gift in her hands?

The full Rs 18,00,000 is taxable as Income from Other Sources. Immovable property received free from a non-relative is taxed at its stamp duty value when that exceeds Rs 50,000, and the entire value is taxed, not only the excess.

  1. ANot taxable because immovable property gifts are always exempt
  2. BTaxable at Rs 18,00,000 as Income from Other SourcesCorrect
  3. CTaxable only to the extent it exceeds Rs 50,000, that is Rs 17,50,000
  4. DTaxable as long-term capital gain

Explanation

Immovable property received without consideration is taxable if the stamp duty value exceeds Rs 50,000, and the full stamp duty value is taxed under Other Sources, not just the excess. Here the full Rs 18,00,000 is taxable. Gifts from specified relatives would be exempt, but a friend is not a relative.

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