India, Sept. 13 -- The Income Tax Appellate Tribunal (ITAT) has ruled that gifting an asset such as property or shares to a spouse does not attract capital gains tax at the time of the gift. However, any income generated from the gifted asset, such as rent or dividends, is added to the donor's income and taxed accordingly.

The ruling clarifies that a gift to a spouse is not considered a sale for capital gains purposes, though any income arising after the gift is taxable in the hands of the person who made the gift.

It is important to note that the capital gains exemption applies by default to investment in only one residential property. However, if the long-term capital gains are less than Rs.2 crore, an individual can invest in two res...