foriegn funds received as gift
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 February 2011
the person received gift from NRI(His relative) amounted to =3619806
he purchased site for his purpose amounted to =1467143
remaining taken as gift amounted to=2150663
his uncle given 524000 to him by way of sale of land
the amount transactions is done through bank and
mentioned in the account. now how should we deal this in income tax.
he purchased site for his purpose amounted to =1467143
remaining taken as gift amounted to=2150663
his uncle given 524000 to him by way of sale of land
the amount transactions is done through bank and
mentioned in the account. now how should we deal this in income tax.
13 February 2011
1.
Gifts received from Relatives is tax free.
Such relative must be covered under the definition of relative as given U/s 56 of the IT Act.
2.
In case uncle gives him Rs 524000/- this amount is exempt for the nephew.
In the return of Uncle Capital Gains
income or loss to be computed by considering whether the asset is a long term capital asset. His Uncle will have to pay tax in case there is a gain from such sale. The tax rates and computation of Capital Gains will depend upon the holding period of the asset by his uncle.
Gifts received from Relatives is tax free.
Such relative must be covered under the definition of relative as given U/s 56 of the IT Act.
2.
In case uncle gives him Rs 524000/- this amount is exempt for the nephew.
In the return of Uncle Capital Gains
income or loss to be computed by considering whether the asset is a long term capital asset. His Uncle will have to pay tax in case there is a gain from such sale. The tax rates and computation of Capital Gains will depend upon the holding period of the asset by his uncle.
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Querist : Anonymous
Querist :
Anonymous
(Querist)
21 February 2011
what about foreign funds received by him how should we can show them
25 July 2024
When dealing with foreign funds received as a gift from an NRI (Non-Resident Indian) and subsequent transactions related to it, here are the considerations for income tax purposes:
### 1. Foreign Gift Received:
- **Amount Received as Gift**: ₹36,19,806
- This amount is received from a relative who is an NRI.
**Tax Treatment:**
- Gifts received from relatives, including NRI relatives, are generally not taxable in the hands of the recipient under the Indian Income Tax Act. Therefore, ₹36,19,806 received as a gift from your relative (who is an NRI) is not taxable in India.
**Documentation and Reporting:**
- While gifts themselves are not taxable, it's essential to maintain proper documentation and records of the gift received. Ensure that you have a confirmation of the gift transaction, ideally through a Foreign Inward Remittance Certificate (FIRC) or any other documentation from the bank showing the transfer of funds.
### 2. Utilization of Gifted Funds:
- **Purchase of Site**: ₹14,67,143
- **Remaining Gift Amount**: ₹21,50,663
**Tax Treatment:**
- The utilization of the gifted funds to purchase the site does not attract any tax implications unless there is any income generated from the site subsequently (like rental income or capital gains upon sale).
### 3. Additional Transaction (Uncle's Contribution):
- **Uncle's Contribution from Sale of Land**: ₹5,24,000
**Tax Treatment:**
- If your uncle has given you ₹5,24,000 as a gift or as a part of the sale proceeds from his land, the tax treatment would be similar to the gift received from the NRI relative. Gifts received from a non-relative (like your uncle) exceeding ₹50,000 in a financial year are taxable unless exempted under specific provisions (like when received on occasions like marriage, etc.).
**Documentation and Reporting:**
- Ensure proper documentation and recording of this transaction as well, similar to the gift received from the NRI relative.
### Summary:
- Gifts received from relatives (including NRI relatives) are generally not taxable in India.
- Ensure proper documentation like bank statements, gift deed (if applicable), and maintain records of transactions related to the gifted funds.
- If the gifted funds are utilized to acquire assets (like the site in this case), there are no immediate tax implications unless there is income generated from those assets later on.
For precise guidance tailored to your specific circumstances, especially regarding documentation and compliance, it's recommended to consult with a tax advisor or chartered accountant who can provide advice based on the latest tax laws and regulations in India.
### 1. Foreign Gift Received:
- **Amount Received as Gift**: ₹36,19,806
- This amount is received from a relative who is an NRI.
**Tax Treatment:**
- Gifts received from relatives, including NRI relatives, are generally not taxable in the hands of the recipient under the Indian Income Tax Act. Therefore, ₹36,19,806 received as a gift from your relative (who is an NRI) is not taxable in India.
**Documentation and Reporting:**
- While gifts themselves are not taxable, it's essential to maintain proper documentation and records of the gift received. Ensure that you have a confirmation of the gift transaction, ideally through a Foreign Inward Remittance Certificate (FIRC) or any other documentation from the bank showing the transfer of funds.
### 2. Utilization of Gifted Funds:
- **Purchase of Site**: ₹14,67,143
- **Remaining Gift Amount**: ₹21,50,663
**Tax Treatment:**
- The utilization of the gifted funds to purchase the site does not attract any tax implications unless there is any income generated from the site subsequently (like rental income or capital gains upon sale).
### 3. Additional Transaction (Uncle's Contribution):
- **Uncle's Contribution from Sale of Land**: ₹5,24,000
**Tax Treatment:**
- If your uncle has given you ₹5,24,000 as a gift or as a part of the sale proceeds from his land, the tax treatment would be similar to the gift received from the NRI relative. Gifts received from a non-relative (like your uncle) exceeding ₹50,000 in a financial year are taxable unless exempted under specific provisions (like when received on occasions like marriage, etc.).
**Documentation and Reporting:**
- Ensure proper documentation and recording of this transaction as well, similar to the gift received from the NRI relative.
### Summary:
- Gifts received from relatives (including NRI relatives) are generally not taxable in India.
- Ensure proper documentation like bank statements, gift deed (if applicable), and maintain records of transactions related to the gifted funds.
- If the gifted funds are utilized to acquire assets (like the site in this case), there are no immediate tax implications unless there is income generated from those assets later on.
For precise guidance tailored to your specific circumstances, especially regarding documentation and compliance, it's recommended to consult with a tax advisor or chartered accountant who can provide advice based on the latest tax laws and regulations in India.
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