Gift tax

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Sam Whelton (Querist)
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29 July 2013 Apparently, a prominent TV tax program has stated that the definition of a relative under section 56(2)(vi) does not include female ascendants or descendants. That is, while a paternal grandfather (dada) can give a gift of Over Rs. 50,000 to his grandson without any tax consequences for the grandson, a maternal grandfather (nana) cannot do so. Similarly, a son-in-law cannot give or receive a gift from his mother-in-law.

As I read the definition (below), this is how "relative" is defined under 56 (2) (vi):

For the purposes of this clause, "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).

Webster's Dictionary defines Lineal as: "consisting of or being in a direct male or female line of ancestry", specifically supporting my contention that both male and female relatives would qualify.

What do the Experts think? Is there any case law to support this? If you agree, should we write to this prominent TV personality to correct the misunderstanding?

Many thanks.

Sam Whelton

Sam Whelton (Querist)
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31 July 2013 No expert opinion ?

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