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My father wants to gift 5 lacs cash , what should i do ?

Rakesh (Others) (147 Points)

08 January 2015

RESPECTED EXPERTS ,

My maternal uncle wants to gift me one house .I have one brother . We are twins . My maternal uncle wants to gift house on our birthday . My question is ..
While making and registring Gift deed , more than 10 lacs money is required , We have arranged around 5 lacs from our savings , still 5 lacs is needed . Can my father give me 5 lacs ? Will we also have to prepare a gift deed for that ? Or Should my father transfer money from his account to my or my brother account ?

Please resolve this problem ... What should be the right way to execute this gift deed ?

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11 Replies

Z ( ) (2960 Points)
Replied 08 January 2015

Gift from uncle would be taxable , because he is not covered under definition of relative, but gift from father wont be taxable , you should prepared a gift deed for 5L you intend to receive from father

Explanation to S. 56(2)(vii)

“relative” means—

(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);]

Rakesh (Others) (147 Points)
Replied 08 January 2015

It means , we cant take gift from my maternal uncle ... If we take and the property value is more than 50 lacs then who will be responsable to fill tax for that gift deed ?

transfering money from my father account to our will not be valid ? Is it necessary to make an gift deed while receiving gift from father ? Is Bank to bank transfer not the proof ?

Z ( ) (2960 Points)
Replied 08 January 2015

You can take the gift, it will just be taxable

If you are not a major then this income will be clubbed in the income of that parent which has higher income. Otherwise the tax implications are on you

Explanation to S.64(1A)

For the purposes of this sub-section, the income of the minor child shall be included,—

(a) where the marriage of his parents subsists, in the income of that parent whose total income (excluding the income includible under this sub-section) is greater ; or

(b) where the marriage of his parents does not subsist, in the income of that parent who maintains the minor child in the previous year,

and where any such income is once included in the total income of either parent, any such income arising in any succeeding year shall not be included in the total income of the other parent, unless the Assessing Officer is satisfied, after giving that parent an opportunity of being heard, that it is necessary so to do.

I'd say its highly recommendatory to have a gift deed. It is a prima facie evidence that gift was given

A Mere bank transfer is just an evidence as to flow of funds

Why specifically asking if the value is above 50Lakhs? (For stamp duty purpose??)

Read the following aswell

S.56(2)(vii)(b)

In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head “Income from other sources”, namely....................

where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,—

(b) any immovable property,—

(i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;

Mihir (Wealth Manager) (5293 Points)
Replied 08 January 2015

Gift deed is mandatory for gifting immoveable property. And gift deed has to be stamped and registered. This gift of house from your maternal uncle to you is not taxable.

Cash gift is also not taxable but documenting this transaction will be helpful.

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