Cash gift

This query is : Resolved

Share Report Follow Query Ask a Query

rohit choudhary

rohit choudhary (Querist)
Follow

22 August 2012 cash gift of 10 lakh given to spouse.whether there is any provision of income tax applicable on it.

Taxguy

Taxguy (Expert)
Follow

22 August 2012 Section 56 of IT Act.

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
Follow

23 August 2012 Gift from Relative is Exempt.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
Follow

23 August 2012 Gifts given to relatives are exempt. But, any income that arises out of such income will be taxable in the person who transferred such gifts without any consideration.

e.g: If wife invests Rs.10lacs given as a gift by her husband in a FD, interest on such FD will be taxable in Husband's hands since he has transferred such sum without any consideration

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
Follow

23 August 2012 However, the situation i mentioned can be avoided by giving a gift to wife and registering the same via a gift deed.

For more personalized advice, contact a tax professional

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
Follow

23 August 2012 Dear Srinivas,
Clubbing provisions to be more specific sec 64 (1)(iv) is applicable if transfer is without adequate consideration. Natural love is not taken as consideration hence even if deed is registered it will be clubbed in the hands of transferor

Message likes : 1 times

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
Follow

23 August 2012 Oh is it? Thanks for the clarification sir. :-)

In this case, what else can we do to avoid taxability? Will it be wise if the husband transfers the money as a loan (with interest) -> wife invests in FD -> pays a nominal amount as interest to her husband?

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
Follow

23 August 2012 you can show it as loan but not in cash because 269ss and 269t will be attracted in that case.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now