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Amounts received by the nominee is taxable in the hands of nominee ?

VANGARI GANGA RAJAM (A) (53 Points)

07 March 2017

whether the amount received by a nominee from the bank is taxable in hands of nominee ???

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15 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 07 March 2017

Depends upon nature of receipt; but usually not.

1 Like

Sanjay S (Chartered Accountant) (1375 Points)
Replied 07 March 2017

Well.. the answer would depend on a lot of other aspects like:

1. Nature of amount received eg. Insurance proceeds, FD maturity proceeds, etc.

2. Whether the nominator is deceased or not?

For instance, any Interest or FD proceeds or any other asset received consequent to death of nominator does not partake the nature of income in hands of recepient (nominee), since its an estate devolving upon them (Inheritance).

1 Like

VANGARI GANGA RAJAM (A) (53 Points)
Replied 07 March 2017

THANK YOU SIRS

VANGARI GANGA RAJAM (A) (53 Points)
Replied 07 March 2017

THE AMOUNT IS FD MATURITY AND AS WELL AS THE BALANCES IN THE SAVING ACCOUNT. THE NOMINATOR HAS DIED AND HIS LEGAL HEIR HAS RECEIVED IT FROM THE BANK.

HOW IT CAN BE DECLARED IN THE RETURN OF INCOME BY THE NOMINEE ????

PLEASE SUGGEST

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 07 March 2017

As exempt income.

1 Like

VANGARI GANGA RAJAM (A) (53 Points)
Replied 07 March 2017

SIR, UNDER WHICH SECTION OR CLAUSE ????

Sanjay S (Chartered Accountant) (1375 Points)
Replied 07 March 2017

Clause (c) of Proviso to Section 56(2)(vi) of the Income Tax Act.

If you were referring to 'Which clause to fill in ITR?'.. then it would depend on which ITR you are intending to file.

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 07 March 2017

The provisions of section 56(2)(vii) inserted w.e.f. 1.10.2009 are not applicable in case the specified properties are received from a relative or in other prescribed circumstances.

In the following circumstances the prescribed amounts or the value of the property received are not chargeable to tax u/s 56(2)(vii)-

(a) Any receipt of sum of money or any property from any relative;
(b) Receipt on occasion of the marriage;
(c) Receipt under a Will;
(d) Receipt by way of inheritance;
(e) Receipt in contemplation of death;
(f) Receipt from a local authority as defined in the Explanation to section10(20);
(g) Receipt from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in section10 (23C);
(h) Receipt from any trust or institution registered u/s 12AA.

2 Like

VANGARI GANGA RAJAM (A) (53 Points)
Replied 08 March 2017

THANK YOU VERY MUCH SIRS FOR YOUR VALUABLE SUGGESTIONS....

VANGARI GANGA RAJAM (A) (53 Points)
Replied 08 March 2017

Sir

In which clause or para in ITR No.4 to be filled regarding the above exempted income details

Sir, whether have to declare it in ITRs ??

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 08 March 2017

Schedule EI

Sanjay S (Chartered Accountant) (1375 Points)
Replied 08 March 2017

Also in clause (5) of Schedule BP, if you have included it in your books of accounts.

VANGARI GANGA RAJAM (A) (53 Points)
Replied 08 March 2017

THANK YOU SIRS

Byagatavalli Shankara (2 Points)
Replied 11 September 2020

Ref to answer by Dhirajlal Rambhia. In the first para it says The provisions of section 56(2)(vii) inserted w.e.f. 1.10.2009 are not applicable in case the specified properties are received from a relative or in other prescribed circumstances. But the very next sentence contradicts the same. Please explain without any ambiguity the two sentences contradicting each other.

Also inheritance means only a legal heir? What if one is just a friend and gets property or money by being named in a Will? Any taxes are to be paid by the receiver?

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