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Exemption under section 56

960 views 1 replies

Prateek

Student Others

24 Points Posted on 05 September 2012

Hello,

I've been reading about saving income tax through making gifts to parents as dictated by section 56. Though there are a few doubts that linger:

1) If i transfer an amount of 10k pm to my mother who is a home maker, what should be the action to be able to show it as a gift . In all the examples i read up, they had invested in fixed deposits after transferring, which made the amount tax exempted even from the income of transferor. Can similar theory be applied to recurring transferes, whhich are being invested as RDs in my mothers account ?

2) How can gift deeds be executed for the aforementioned example. Will the stamp paper action be necessary?

3) How do I state it in my e-filing form, now that they insist no other document is to be enclosed.

4) Just to clear ; by exemption I mean the amount being exempted from my salary and due to it being less than 1.9 Lacs, being exempted from my mothers too at the same time.

Thanking in anticipation

Replies (1)

U S Sharma

glidor@gmail.com

21068 Points Posted on 05 September 2012

1) you can gift any amount to your mother, there is no bar to gift the money to relative and mother is well within the limit of relative under incometax.

2) if paid by cheque, stamp paper may not be needed, but advised to keep record and make it notorized for future records, as at the time of any departmental clarification , we forget the dates and transaction mostly, so the affidavits can be kept in file to remind the same. ( search files section of CCI for deed format)

3) no need to show the gifts in your tax return as the gifts are issued from tax paid income.

4) there is no exemption for the doner of gift, he has to pay full tax and whatsoever is balance in his/her hands after paying tax, is available for making gift to relatives or others.