Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

I have given rs. 2,00,000/- as gift to my dad

KAILASH A. DANGADE (ACCOUNTS & FINANCE MANAGER) (121 Points)

27 July 2013

Hi,

I have paid Rs. 2,00,000/- to My Dad as Gift from me in Year F.Y. 2012-13.

I have salary Income of Rs. 5,50,000/- & Father Income is Rs. 4,25,000/-

What will be Tax on this Transaction and how will be liable to pay Tax on the same.

Can anyone guide me.

Thanks

Kailash Dangade

Reply
Follow
Share

23 Replies

Gaurav Chamoli (Articled Trainee) (52 Points)
Replied 28 July 2013

It is not taxable.

Sundeep Tyagi (Prop) (25 Points)
Replied 28 July 2013

There will be no tax.

Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 28 July 2013

Gift given to relative is exempt under Income tax act in the hands of receipient of gift irrespective of amount of gift,father come under category of relative

but u can not claim this gift as expense while calculating income tax liability similarly ur father need not to consider gift amount as income while calculating income tax liability,but any income arise from investment out of such gift money will be clubbed in ur income

1 Like

Gopa Ganesh Krishnan (Chartered Accountant) (39 Points)
Replied 28 July 2013

gift to relative is not taxable.

ashutoshmishra (cafinal) (67 Points)
Replied 29 July 2013

Dear kailash ji,

there is a relative definition in IT ACT. dad is covered in that relative definition......so any amount paid to dad is not taxable according to income tax act.... and hence no tax is on Rs200000........

regards,

Mihir (Wealth Manager) (5293 Points)
Replied 29 July 2013

Keep documents on the transfer of Rs. 200,000/- to your father. U/s 68 allows IT to be suspiscious of these transactions and demands a documentary proof and if need be, the source of this amount.

Yes, it is not taxable.

3 Like

Gitika bajaj (a) (260 Points)
Replied 29 July 2013

Dear members....would the above answer be same if instead of cash it was immovable property?? Sorry for adding this query in above question ....

1 Like

Mihir (Wealth Manager) (5293 Points)
Replied 29 July 2013

@ Gitika

One is required to prepare a gift deed duly stamped and registered in order to gift an immovable property. This gift deed can be submitted to the society. The gift deed is required to be expressly acknowledged the receipt of the gift by the donee. However, gift deed is not absolute, which means that if there are other legal heirs, they can contest this gift deed, therefore, if there are other legal heirs, their no-objection certificate is to be submitted after determining the list of legal heirs for which succession certificate is necessary.

1 Like

monica (student) (59 Points)
Replied 29 July 2013

gift to relative is not taxable

Chinnu Raj (CA Final Student B.Com) (1067 Points)
Replied 29 July 2013

Gift given to father,mother,sister,brother,or any other relative there would be no tax.So in your case nothing would be taxable

Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 29 July 2013

Here gift include Immovable property Given for NIL consideration

so even immovable property gifted shall not be taxable in the hands of Receipient

CA Aman Gupta (Chartered Accountant) (344 Points)
Replied 30 July 2013

As per Proviso to Sec. 56(2)(vii) Gift to Relative is not Taxable.Further as per Explanation to Sec. Relative includes Father. Hence gift to father not taxable in the hands of your father. However, it is pertinent to note that the said amount will not be allowed as expenditure in computing your Total Income.

Further, coming to the provisions of Clubbing of Income (Sec. 60-65) arising out of Investment of said money, please note that Clubbing Provisions are not applicable on the relation of Son and Father. It is applicable on relation of Spouse, Son's wife, minor child. Hence contrary to the view expressed by Nuli, income arising from said Rs. 2,00,000/- will not be clubbed in your income and will be taxable in the hands of your father.

1 Like