Gift to a relative - whether expenditure

This query is : Resolved

Guest

Guest (Querist)

28 December 2010 Dear Friends / Experts,

A, an individual is having business.

A has gifted a mobile phone to his relative.

Query

Whether 'Gift of mobile phone' to relative is an expenditure or Capital should be directly debited for Gift Given.

Ans : .................

Similarly, A has received a sum of Rs.2 Lacs from his mother as a GIFT.

Whether Capital should be directly credited for this GIFT receipt.

Ans : .................

Is there any impact for cash receipt as Gift from mother to son ? (A shall obtain letter from mother confirming the gift)

Ans : .................

I shall wait for the Experts' Expert views.

Thanks.
DK.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 December 2010 1. Cost of phone may be debited to capital account.
2. Cash gift received may be credited in capial account. Also delare as income and simultenously claim exemption in the income tax return.
3. A letter of gift may be executed ,specifically showing the source of the donor,and kept in file if needed to produce before ITO under scrutiny procedings.

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