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Exempted income u/s 56

raja (owner) (86 Points)

07 June 2016

Dear Gurus,

I have married in past financial year FY 15-16. In the financial year my friend gifted me Rs 5,00,000 on various dates after my marriage date.

My Query :

1) shall i disclose the income from other sources and shall i get excemption fro Rs 5 lakh u/s 56.

Thanks in Advance

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7 Replies

Taxhelp.com (Professional) (94 Points)
Replied 08 June 2016

Hi Raja

Since, receipts are not on the ocassion of marriage and it exceeds 50K, you should disclose it as your income and pay tax. If you could show loan from friend and return the same to your friend, the same can be treated as loan transaction.

Thanks

1 Like

SHRAWAN KUMAR YADAV (CA FINAL-M.COM) (58 Points)
Replied 08 June 2016

Agree with expert.

1 Like

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 08 June 2016

U/s 56(2)(vii) Gifts received by individual on occasion of marriage of individual is exempt from income tax. Other gifts are taxable if value of such gift exceeds Rs.50K.
since in your case you received cash from friend after your marriage, you have to offer such amount for tax under the head "Income from other sources".

1 Like

CA VIRAL SANGHVI (Finance head) (681 Points)
Replied 08 June 2016

Hiiii,

The gift received after marriage is taxable under group Income from other source ,or you can show it as gift received on the occassion of marriage and take exemption on it.

1 Like

CHANCHAL JAIN (Partner) (34 Points)
Replied 08 June 2016

Dear Raja,

The said gift is Exempt under section 56 of the Act. At the occation of marriage doesn't only means the date of marriage.

In this context,the Courts have held that “on the occasion of marriage” does not mean on the date of marriage but the gift should be associated with the event of marriage. It would mean that the marriage should be the immediate cause of making the gift.

These are the some cases in which your case covered:

1. In the case of A Rudrakoti v. CIT 149 CTR 81 (Mad) – a gift given 4 years after marriage was reckoned to be gift on occasion of marriage and therefore was held to be entitled to exemption.

2. In the case of CGT v. G Venkataswamy 236 ITR 539 (Mad), gift given after 14 years of marriage was held to have been given “on the occasion of marriage” and therefore exempt.

As I can see from your profile that your location in Chennai and the above judgements are pronounced in the Madras high court, that is also a big benefit for you.

1 Like

raja (owner) (86 Points)
Replied 08 June 2016

Thanks a lot sir.

Tofeel Ahmed (2 Points)
Replied 27 December 2016

Hello All,

Just wanted to check i hv received cash as a gift from my inlaws before marriage (prior to 4 days), is this amount is taxable or exempted? kindly confirm

Regards

Ahmed