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Question on Income tax:
Mr. A gets a gift of rs. 2 lakhs from his niece and rs. 4 lakhs from his nephew in the financial year 2007-2008. Whether these gifts are taxable?
gifts from relatives are exempt. refer sec 56 of the IT act
But does niece and nephew qualify to be a relative???? Niece and nephew are not lineal descendants. Also the definition does not say specifically niece or nephew.
as per sec 56 nice nd nephew is not a relative in that case whole amt is taxable in F.Y. 2007-08 under income from other source head.
It is taxable in the hands of Mr.A
b coz niece & nephew is not a relative of Mr.A as per section 56(2)(vi) of The Income Tax Act,1961.
As per S56(2)(vi) Nephew and Niece are not covered under relatives. They are not a Lineal ascendant or descendant. So the hole amount is taxable under Income from other sources.
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