Dear distinguished forum members, i have a query:
My brother's father-in-law recently sold his property and wants to gift the money earned (above Rupees 50,000) from the transaction (after he pays his long-term capital gains tax) via a single cheque to my brother to help him pay off some of his outstanding housing loan. His father-in-law already has the money ready in a savings account in a nationalized bank.
- Since he is related to my brother but not like a direct relative (like father / mother / spouse / sister / brother), should they execute a gift deed before he gives out a cheque in favor of my brother?
- Since this is intended only to pay off his housing loan and since my brother is already in the maximum income tax bracket, how should he ensure that this does not pose additional tax burden on him? Will a gift deed suffice or should he pay any additional tax to avoid any IT implications?
- My brother has regularly been filing IT returns for the past several years. What should he do different this year when he files an IT return? How should he indicate this additional income, if so?
Appreciate your replies, and also any insights on how he should do this to legally avoid any additional tax burden.
Thank you,
Srinidhi.
CAclubindia
