India, Aug. 2 -- In the context of intra-family transfers, such as gifts or sales between spouses, these transactions can be considered legitimate if it is legally executed through a registered gift deed or sale deed, as applicable. It is pertinent to note that the consideration for such transfer has to be real and traceable and not just a book entry. Such transactions should not be for the sole purposes of tax avoidance and therefore, the genuine change in the ownership should be established.

A landmark judgment from the Income Tax Appellate Tribunal (ITAT) Mumbai, delivered on June 9, 2025, affirmed that a taxpayer can claim full Section 54 capital gains exemption even when the new property is acquired from a spouse, provided all condi...