Taxability of Gift to Family Trust

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When a monetary gift is made to a private family trust where the donor has no vested interest, the tax implications primarily fall on the recipient, not the donor. Gifts exceeding £50,000 are generally taxable for the recipient. If the gift is not from a relative and exceeds £200,000, the donor may face a penalty under Section 269ST, even if transferred via bank and documented with a gift letter, rather than a formal deed.

Akshay

Akshay (Querist)

18 January 2021 If any monetary gift is given to a private/family trust where the donor is not having any vested interest then what are its tax implications? Is it exempted in hands of the donor irrespective of the gift amount?
Pls suggest..

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

19 January 2021 Monetary gift can't be 2 lacs or more. It's exempt in case relative trust.

Akshay

Akshay (Querist)

19 January 2021 If it's not of relatives and amount is more than 2 L?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

19 January 2021 Equal amount of penalty payable under section 269st.

Akshay

Akshay (Querist)

19 January 2021 But it is not in form of cash.. If it is all with proper gift deed and transferred through bank then any tax implications are there for the donor?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

19 January 2021 No gift deed required for amount transferred through bank, a letter is enough. Gift in any form exceeding Rs 50,000 taxable as income.

Akshay

Akshay (Querist)

19 January 2021 Taxable for the recipient and not for the donor, pls confirm.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

19 January 2021 Yes taxable for the recipient.

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