06 August 2013
As we all know, gifts received from non relative is taxable. In order to avoid, i have one solution: Person willing to give gift to other person shd open a joint bank a/c in the names of both and put a joint FDR in the name of both donor and donee. Simultaneously the person giving gift shd prepare a will and in this, he shd specify that the deposit amount standing in his name along with the other person shd be given to the second named deposistor(ie., donee in the present case). As per Sec 56 gift received by virtue of a will is exempt in the hands of a donee is exempt and hence one can avoid paying income tax on this type of gift from a non relative. I want my expert colleagues to give and share their views about this procedure. Any flaws in the whole thing may kindly be specified. You may also send mail to my mail id anukumars@vsnl.net Regards CA P Prasanna Kumar
07 August 2013
There lies a great danger in the proposed arrangement. Please note that a WILL can be cancelled any time and a person can execute as many WILLS as possible. The last WILL survive. Its genuineness can also be challenged in court. Added to the above is the question of title which could be obtained only after death.
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