Cash transaction

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 December 2011 PlZ clarify the doubt

Can Brother give a sum of Rs.8 Lakhs in cash to His Own Sister. As per IT this allowable and for this any agreement required.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 December 2011 Gifts received from a relative are not taxable in the hands of the recipient.

If the gift is from a disclosed source of income, then there is no problem.

Querist : Anonymous

Querist : Anonymous (Querist)

30 December 2011 Thank U for your reply and If the amount has shown as Loan is there any problem and what type of documents should require to prepare for Gift or Loan

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 December 2011 Section 269SS of the Income Tax Act prohibts accepting cash loans in excess of Rs. 20,000/-.

Penalty is levied equal to the amount of the loan if the provisions of Section 269SS are violated.

You can give a loan by executing a simple loan agreement.

Similarly you can execute a gift deed for giving gift, although it is not necessary.

Querist : Anonymous

Querist : Anonymous (Querist)

30 December 2011 Thank U for your quick reply.
What is the circumstances in the following situations.
1. Gift amount received if repaid to transferor or Gift payer.

2. Gift received in future if converted to as Loan

3. How to account Gift in books of accounts i.e. under which group we have to treat

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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30 December 2011 1. Gift cannot be repaid. Only a loan can be repaid.

The proper transaction will be to give a gift back.

2. How can you convert a gift into a loan? Today you account it as gift and later on transfer to loan account. Why do you want to do this? Even if you do so, Section 269SS gets attracted.

3.Gift is treated as indirect income in books of accounts.

Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2012 Thank U for your reply in which head we have to show in computation and Please give the section as per IT for exemption for this amount

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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03 January 2012 Gifts are taxable under the head 'Income from Other SOurces'.

Section 56(2)(vii) deals with gifts. The same section provides exemption for gifts received from relatives and also defines the word 'relative'.

Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2012 THANKS A LOT

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