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About gift

ITR Filing 927 views 1 replies

erdeep

engineer

309 Points Posted on 30 October 2014

Respected Experts ,

I have 2 Quarries :

Query 1. If a person transfers (via NEFT) around 6 Lac to his wife account for purchasing of a property & both are Income Tax Assessee then How entries will be reflected in:
a) Balance Sheets of both Husband & Wife
b) Tally entries of both Husband & Wife
c) Whether it will be considered as Gift?
If Yes, then they did not make gift deed, will plain paper with signature of both will be suffice?
d) And, Is it mandatory to show as Gift, Can't a husband can transfer amount to his wife account?

Query 2. If a Person give Gift of around 2 Lac to his brother via A/c Payee Cheque, & both are Income Tax Assessee then How entries will be reflected in:
a) Balance Sheets of both Guys
b) Tally entries of both Guys

Regards Deep

Replies (1)

Swami Ayyappa Nuli

TAX ADVISOR & CONSULTANT AT G.S.T SUVIDH

1372 Points Posted on 30 October 2014

As cash is not a Immovable property as per Transfer of property act, such gift can be made with out registered instrument. Cash gift to his wife is appropriation after tax(It is not exempt) and such gift is exempt in the hands of wife also. But any income arise from such gift will be taxable in the hands of transferor even though both are Income tax assessee's. So in your case if wife transfers property purchased out of gifted money and if such property is sold then any capital gain arise will be taxable in the hands of husband. and coming to Tally entries in first instance

In the books of both husband and wife is as follows

Tally entries: Gift(Expenditure) a/c Dr To Cash or Capital a/c Dr To Cash a/c

Such gift need not to be shown in balance sheet.

Entries will not change whether gift is made to brother or wife