Do I pay tax if my parents gift me their house?

No - property gifted by a defined 'relative' or inherited under a will is fully tax-free to the recipient, any value. Gifts from friends/distant relatives above Rs 50,000 in value are taxable to the recipient. Gifts from defined relatives (spouse, siblings, lineal ascendants/descendants, etc.) are exempt at any value Property inherited under a will or succession is also exempt Gifts from non-relatives with SDV over Rs 50,000 are taxable to the recipient Document the gift properly (gift deed) to establish your cost basis for a later sale

Is inherited property taxable?

No - property gifted by a defined 'relative' or inherited under a will is fully tax-free to the recipient, any value. Gifts from friends/distant relatives above Rs 50,000 in value are taxable to the recipient. Gifts from defined relatives (spouse, siblings, lineal ascendants/descendants, etc.) are exempt at any value Property inherited under a will or succession is also exempt Gifts from non-relatives with SDV over Rs 50,000 are taxable to the recipient Document the gift properly (gift deed) to establish your cost basis for a later sale

CAPGAIN › Answers › Capital gains & TDS on property › Do I Pay Tax if My Family Gifts Me a Property?

Do I Pay Tax if My Family Gifts Me a Property?

Short answer: No - property gifted by a defined 'relative' or inherited under a will is fully tax-free to the recipient, any value. Gifts from friends/distant relatives above Rs 50,000 in value are taxable to the recipient.

Law: Section 56(2)(x), Income-tax Act 1961 · Authority: CBDT · Status: in force · Checked 25 Sept 2026

What you need to know

Gifts from defined relatives (spouse, siblings, lineal ascendants/descendants, etc.) are exempt at any value
Property inherited under a will or succession is also exempt
Gifts from non-relatives with SDV over Rs 50,000 are taxable to the recipient
Document the gift properly (gift deed) to establish your cost basis for a later sale

Who this applies to: family members gifting/receiving property, CAs

Official / primary source: incometaxindia.gov.in (government source)

The law behind it

Inheritance and Gift of Immovable Property Involving NRIs/OCIs

An NRI or OCI can inherit any property in India, including agricultural land, from a resident or another NRI. They can also give or receive property as a gift, but gifting agricultural land or receiving a gift from an unrelated foreign national needs closer FEMA compliance checks.

NDI Rules 2019, Rule 21(b)-(c) · in force · source

24-Month Holding Period for Long-Term Capital Asset Status (Property)

Hold a property over 24 months before selling and your gain is 'long-term', with better tax treatment. This has applied since AY2018-19 and was NOT changed by the July 2024 budget reforms.

Section 2(42A), Income-tax Act 1961 / Section 2, Income-tax Act 2025 · in force · source

Section 393(1), Income-tax Act 2025 - Consolidated TDS on Property/Rent/Contractors

The new Act merges old Sections 194-IA, 194-IB, 194-I plus contractor/professional TDS into one Section 393(1), reported on one Form 141. The 1% rate and Rs 50 lakh threshold for property from a resident are unchanged - only the paperwork changed.

Section 393(1), Income-tax Act 2025 · in force · source

Section 26, Income-tax Act 2025 - House Property Deductions (successor to Section 24)

The 30% standard deduction and home loan interest rules from Section 24 continue as Section 26 of the new Act.

Section 26, Income-tax Act 2025 · in force · source

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