Taxability of gift received

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Chegi Reddy Pothi Reddy (Querist)
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17 December 2015 hi sir,
please clarify my doubt.
i received gift from my wife cousion brother, who is in UK.
will it be the taxable to tax?
what should be the wayout for me legally to receive funds& pay tax.

Please give me the advice.

Thanking you.

Ankur Singhal

Ankur Singhal (Expert)
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17 December 2015 Dear Mr. Reddy

Gift received from relatives are not taxable.
Relative means:-
Definition of relative for the purpose of section 56(2)(vii) is reproduced as under:

(i) spouse of the individual;

(ii) brother or sister of the individual;

(iii) brother or sister of the spouse of the individual;

(iv) brother or sister of either of the parents of the individual;

(v) any lineal ascendant or descendant of the individual;

(vi) any lineal ascendant or descendant of the spouse of the individual;

(vii) spouse of the person referred to in clauses (ii) to (vi).

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Chegi Reddy Pothi Reddy

Chegi Reddy Pothi Reddy (Querist)
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17 December 2015 https://www.caclubindia.com/articles/relatives-under-the-income-tax-act-a-relative-concept-963.asp?utm_source=articles&utm_medium=sharestrip&utm_campaign=socialshare

sir please see the 7th point, in that cousion is excluded from definition of relative.

Ankur Singhal

Ankur Singhal (Expert)
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17 December 2015 Mr reddy
tell me exact status of ur cousin brother.
Who is he parental uncle son or maternal uncle son

Ankur Singhal

Ankur Singhal (Expert)
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17 December 2015 And also any cousins are not covered in defination of the Relative.

Ankur Singhal

Ankur Singhal (Expert)
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17 December 2015 Gift received from cousins will be taxable in ur hands under the head income from other sources.

Chegi Reddy Pothi Reddy

Chegi Reddy Pothi Reddy (Querist)
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17 December 2015 relationship is ...

Brothers wife -father -sister -son.

and how can i legally receive funds¬ pay the tax

Ankur Singhal

Ankur Singhal (Expert)
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17 December 2015 your cousin is not a relative under income tax.

As ur cousin is nri
Receive money in your bank account
and then show it in the itr of that year as income under the head other sources(gift income)

Chegi Reddy Pothi Reddy

Chegi Reddy Pothi Reddy (Querist)
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17 December 2015 can we break the gift received chain i.e son will give the gift to mother(sister), sister will giv the gift to brother...like that,,?
is it legally acceptable.

Ankur Singhal

Ankur Singhal (Expert)
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18 December 2015 DEAr
breaking of chain has no problem.
But if your case comes in scrutiny then that will become a case of tax evasion because you are creating a chain to avoid tax.
The ultimate source of gift would be the same i.e NRI.

In my opinion no need to create unnecessary hustle.