Gifting a flat to family: stamp duty, and tax under the Income-tax Act, 2025

Rules and rates as of 15 October 2026.

Parents gifting a flat to a son or daughter, or one spouse moving a home into the other's name, is one of the most common property transfers in India. It involves two separate bills that people often mix up: the state's stamp duty on the gift deed, paid now, and income tax, which is usually nil on the gift itself but comes back when the flat is eventually sold. This explainer walks through both under the Income-tax Act, 2025, which replaced the 1961 Act from 1 April 2026.

First, a gift of a flat has to be on paper

A flat cannot be gifted by word of mouth. As the Supreme Court restated in N.P. Saseendran v. N.P. Ponnamma (24 March 2025), a gift of immovable property under section 123 of the Transfer of Property Act must be made by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses, and the donee must accept it during the donor's lifetime. That registered gift deed is what attracts stamp duty.

Income tax on receiving the flat: section 92

The rule that taxes gifts now sits in section 92(2)(m) of the 2025 Act, under "Income from other sources" (it was section 56(2)(x) of the 1961 Act). If you receive immovable property without consideration and its stamp duty value is more than ₹50,000, that whole stamp duty value is treated as your income for the year. If you pay something but less than the stamp duty value, the gap is taxed when it exceeds the higher of ₹50,000 or 10% of what you paid.

Section 92(3) switches this off for property received:

• from a relative;
• on the occasion of your marriage;
• under a will or by inheritance;
• in contemplation of the donor's death.

"Relative" is defined in section 92(5)(g). For an individual it covers your spouse; your brothers and sisters; your spouse's brothers and sisters; your parents' brothers and sisters; any lineal ascendant or descendant of yours or of your spouse (parents, grandparents, children, grandchildren, on both sides); and the spouse of any of these people. So a flat from a parent, grandparent, sibling, spouse or parent-in-law is not income in your hands. A flat from a cousin or a friend is, because they fall outside the list.

The giver does not pay capital gains tax on the gift either. Section 70(1)(b) says the transfer of a capital asset by an individual or HUF "under a will or a gift or an irrevocable trust" is not treated as a transfer for capital gains.

Gifts to a spouse or daughter-in-law: the clubbing catch

A gift to your spouse is tax-free to receive, but the income from it may still be taxed in your hands. Under section 25(a), for house property income, an individual who transfers property to a spouse (except under an agreement to live apart) or to a minor child (other than a married daughter) without adequate consideration is treated as its owner. Separately, section 99(1)(a)(ii) and 99(1)(b) add to your income what your spouse, or your son's wife, earns from assets you transferred to them without adequate consideration. If the gifted flat is rented out, the rent is likely to be taxed as yours. A gift to an adult son or daughter does not have this problem.

When the flat is sold: the parent's cost and dates carry over

This is where most of the tax sits. Under section 73(1), Table Sl. No. 1, if you got an asset under a gift or will, your cost of acquisition is what the "previous owner" paid for it, plus any improvement cost borne by them or you. Section 73(2)(a) defines previous owner as the last owner who acquired it by a mode other than gift, will or inheritance. So if a grandparent bought the flat, gifted it to a parent, who gifted it to you, the grandparent's purchase price is your cost.

The holding period carries over too. A building is long-term after 24 months under section 2(101), and clause (c)(B)(I) of that definition counts the time the previous owner held the asset. Long-term gains on property are taxed at 12.5% under section 197.

The stamp duty value on the date of the gift is not your cost. One exception: if the gift was taxed in your hands under section 92(2)(m) (say, from a non-relative), section 73(1) Table Sl. No. 17 makes the value taxed then your cost.

Stamp duty on the gift deed: it depends on the state

Stamp duty is a state levy, and family concessions vary widely. Here is what we could read on official pages:

State	Gift to family	Gift to others	On a ₹90 lakh flat (to family)
Telangana (outside gram panchayat areas)	Stamp duty 2%, transfer duty 0.5%, registration fee 0.5% (min ₹2,000, max ₹25,000)	Stamp duty 5%, transfer duty 1.5%, registration fee 0.5% (min ₹2,000, max ₹1,00,000)	₹2,50,000
Delhi	No family concession on the revenue department's page: 6% if the donee is a man, 4% if a woman, plus 1% registration fee and ₹100	Same	₹6,30,100 (son) or ₹4,50,100 (daughter)
Maharashtra	A fixed duty of ₹200 on residential property gifted to close family is widely reported; we could not read the Act's Schedule I on an official site	Unverified	Unverified: confirm with the sub-registrar

Telangana's ready reckoner charges family gifts on the market value of the property, and does not define "family member" on the page, so ask the sub-registrar who counts. For any other state, check the stamp schedule or ask the sub-registrar before execution. Most states charge on the government's market value, not on a figure you choose.

Worked example: a ₹90 lakh flat, parent to child, sold later

Meera bought a flat in Hyderabad in August 2024 for ₹75 lakh. In October 2026, when its market value is ₹90 lakh, she gifts it to her son Arjun by a registered gift deed. Arjun sells it in November 2027 for ₹1.05 crore. Assume no improvement costs or brokerage.

At the gift. Stamp duty, transfer duty and fee in Telangana: 2% × ₹90,00,000 = ₹1,80,000; 0.5% × ₹90,00,000 = ₹45,000; registration fee 0.5% = ₹45,000, capped at ₹25,000. Total ₹2,50,000. Meera pays no capital gains tax (section 70(1)(b)). Arjun pays no income tax on receiving it: a son is a lineal descendant, so section 92(3)(a) applies.

At the sale. Arjun owned the flat for about 13 months, but Meera's holding from August 2024 counts, so the total is over 24 months and the gain is long-term.

Capital gain = sale price − previous owner's cost = ₹1,05,00,000 − ₹75,00,000 = ₹30,00,000.

Tax at 12.5% = ₹30,00,000 × 0.125 = ₹3,75,000, plus cess (and surcharge, if Arjun's income is high enough).

Two common mistakes would change the answer. Using the ₹90 lakh gift-date value as cost would show a gain of ₹15,00,000 and tax of ₹1,87,500, half the correct figure. And if the same flat had come from a family friend instead, the full ₹90,00,000 would have been added to Arjun's income for 2026-27 under section 92(2)(m) and taxed at his slab rate; his cost on sale would then be ₹90 lakh under Sl. No. 17.

If the original purchase was before 23 July 2024, section 197(3) can cap the tax at what it would be at 20% with indexation, for resident individuals. How that date test works for a gifted flat is worth confirming with a chartered accountant before you sell.

What to keep on file

• The registered gift deed and the stamp duty receipt.
• The donor's original purchase deed and proof of payment, because that becomes your cost.
• Bills for any improvements by either of you.
• A note of how you are related to the donor, in case the tax office asks why section 92 does not apply.

This is general information, not advice on your situation. A chartered accountant can work through your numbers, and a lawyer should draft the gift deed.