cash gift exemption

Mr. x wants to gift Rs.50,000/each in cash to  his 3son, 2daughter, 1cousin son & 2cousin daughter.

total gift of Rs.4,00,000/- ie 50000 each to eight relatives.

Please Highlight the Income Tax Exemption Rule on above.

Replies (9)

as per section 56(2)(vi), cash gift received is taxable in hands of receipient. However section also specifies some exceptions to this rule. this exception provides that if the cash gift received from relative, it would not get taxed in hands of recipient. Section aslo specifies what is meant by relatives and all the persons mentioned by u are also within the meaning of term relative.

 

Thus, neither of the cash gift received by relatives would get taxed in hands of your relatives who received such cash gift.

 

Regards,

Manoj

Agree with Manoj

plz tell...

if it is not taxable in the hands of recepient...then in what way it will be taxable in the hands of Mr X...?? 

and if gift given in kind does not exceed 50000 in value it is not taxable in the hands of recepient  and on the other hand it is not taxable in the hands of transferor as gift in kind is not a transfer...now wht to do in this case..?? kya ye kisi ke hands mei taxable nahi hai...???

Dear Prachi

Dont get confuse, its simple

 

the one who is giving gift, for him/her gift is not taxable, as he/she is the doner of the amount.

the one who recives the gift, for them it is tax free if the amount is less than 50000/-.

 

and if the amount is less than 50000/- this will be considered as gift but will be tax free in both hands.

doner will never get effected with any amount, which he/she is giving to his/her reletives or others.

 

;)

ok...50000 is not chargeable in both the hands...now i get it....thanks a lot....:) thank u so much...:)

My pleasure

;)

I also want to know on this, hence replying to the same post.

I mainly want to know, can the donor claim tax exemption for the donated amount of said cash gift?

in the example above, can Mr.X claim tax exemption while filing income tax  return?

thanks a lot for the help.

-vishal

Hello

Please let me know the taxability in the hands of donor of cash gift exceeding Rs 50000 to a relative. The donee will not be taxed for the gift as received from from relative but will donor get the dedcution of cash gift from his income...????

Hello,
The Income Tax Act does not provide for any deduction on account of gifts made by an assessee(Donor). Therefore, the gift to your relative does not change your taxable income. 

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