Income tax on cash gift from grandmother

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2015 Dear Experts,

Myself and my wife received cash gift of 3.5 Lac from my grandmother which we subsequently deposited in my wife's new bank account.

Following are my queries;

1. Do I need to show this amount in my itr as an income? if yes, how?

2. My wife is not working (Housewife), do she need to file itr to declare this gift? if yes, under what heads?

3. My grandmother is 85 year old state govt. pensioner. Her income is less than 2.5 Lac/year, hence she do not file itr. She gifted us her cash and account savings from last 10-15 years. Do she need to file itr? If yes how?

4. Do we need to document gift? if yes, how? I mean is there any specific format by govt?

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

31 October 2015 1. Gift received from relatives is exempt hence not required to be shown in ITR.

2. Same as 1 above

3. Exemption limit for super senior citizen is Rs. 5 lacs at present since your grandmother's pension income is much below this limit there is no requirement for filing return for her. In any case she has declared source of income for making gifts being a Govt. pensioner.

4. Gift document is not compulsory for gift of cash or movable property but there is no harm in making a formal gift document.

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Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2015 Dear Abhishek,

Many thanks for the valuable clarification.

I wonder if we need to club interest earned on this amount in my income?

Please through some light on this aspect.

Thanks again.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

02 November 2015 There is no clubbing element involved as far as you are concerned. Only thing is that if your wife invests her share of gift from mother in law and earns income, the same will be clubbed in the hands of mother in law. This is because of clubbing provision u/s 64.

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