Tax implications of gift to maternal uncle

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This discussion clarifies the tax implications of gifting money to a maternal uncle in the UK. It explains that while a niece can receive tax-free gifts from her uncle (as he is considered a relative under Section 56(2)(x) of the Income Tax Act), gifts made by a niece to her uncle are taxable because the uncle is not classified as a relative from the niece's perspective under the same act. The query also touches upon the possibility of creating a gift deed retrospectively for past gifts.

Shantanu Bose

Shantanu Bose (Querist)

03 April 2025 Sir,
My question is :
Why gift money to maternal uncle is taxable u/s 56(2)(x) if brother of parent of an individual is counted as relative according to section 2(41) of income tax,1961 ? My maternal uncle is certainly the brother of my mother who is my parent ?

Also please clarify if gift deed can be made now for gift given in the past.

Thank you

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

03 April 2025 As per sec. 56(2) IT act, niece is not relative for uncle... hence gift received from niece is taxable..

Shantanu Bose

Shantanu Bose (Querist)

04 April 2025 Ok thank you sir, but is uncle relative for niece ? What about gift received from uncle ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

04 April 2025 Reverse is true, for niece: uncle being 'Brother or sister of either of the parents' is relative as per the sec. 56(2)(x) IT act; hence niece can get tax free gift/s from uncle or Bua.

Shantanu Bose

Shantanu Bose (Querist)

04 April 2025 Thank you sir for your kind help

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

04 April 2025 You are welcome.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

29 September 2025 Good luck..

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