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CA Intermediate · Taxation · Basic Concepts

Ramesh, a resident individual, receives a gift of a plot of land from his friend during the tax year 2026-27. The plot has a stamp duty value of Rs 8,00,000 and was received without any consideration. Which of the following is the best description of how the receipt is treated in the context of the basic concepts of income under the Income-tax Act, 2025?

The land is taxable as Income from other sources. Immovable property received without consideration is taxed when its stamp duty value exceeds Rs 50,000 and the giver is not a relative. A friend is not a relative and the value is Rs 8,00,000, so the gift is chargeable.

  1. ACapital receipt, so it is never taxable under any head
  2. BAgricultural income, because the asset is land
  3. CIncome that is chargeable under the head Income from other sources, as the receipt is from a non-relative above the monetary limitCorrect
  4. DExempt in full because gifts from friends are exempt

Explanation

Immovable property received without consideration is taxable in the hands of the recipient if its stamp duty value exceeds Rs 50,000, unless the giver is a relative or another exemption applies. A friend is not a relative, and Rs 8,00,000 exceeds the limit, so the receipt is chargeable under Income from other sources. Treating it as a mere capital receipt ignores the specific charging provision.

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