Shivani (Doctor) (24 Points)
19 August 2013Dear Expert forum members..
1. First of all, i must congratulate on well informed content on the forum.
2. My query is:
My father in law wants to gift me money to purchase a house. I want to know if money so received from father in law to daughter in law for purchase of house in tax exempted. I am working in a govt organization.
3. Thank you all in advance. Waiting for a reply...
NAGASAI.K
(Article Assistant)
(193 Points)
Replied 19 August 2013
As per sec:56 of Income Tax Act, Any gift received from relative is exempt from tax
Relative includes father-in-law
S.R.Associates
(Tax & Investment Consultants)
(115 Points)
Replied 19 August 2013
Shivaniji,
You need not to be worried about the taxability of gift received from your father-in-law because as per income tax act gift from relatives are exempt unlimited.Though the income arise from the house you are going to buy from the money gifted by your Father-in-Law will be clubbed in his income and accordingly taxed in the hands of Your father-in-law.
NAGASAI.
Please don't answer any question on CCI without thorough study.
One Of A Kind
(CA Final & CS Professional Student)
(187 Points)
Replied 19 August 2013
Hello Shivani,
The definition of relative for the purpose of Tax free gifts includes any lineal ascendant or descendant of the spouse of the individual also. so it would be exempted from Tax.
Mihir
(Wealth Manager)
(5293 Points)
Replied 19 August 2013
The money received by you from your father-in-law shall be non-taxable. However, it is advisable to prepare a gift deed duly stamped and registered.
But in case the purchased property is put on rent, the rent received shall be taxable in the hands of your father-in-law, due to the provision of clubbing.
In the future, the long term capital gain out of the sale of property, after using exemptions u/s 54 by you, shall be taxed to your father-in-law.
AZIZ SHAMSUDHIN
(propreitor)
(32 Points)
Replied 20 August 2013
Pooja
(Final CA)
(502 Points)
Replied 20 August 2013
I agree with S.R. Associates and Mihir.
Gift received from father-in-law is exempt from tax since it is gift from a relative covered in the definition of reletive under Income Tax Act. But when a gift is received from either - Spouse, Father-in-law or Mother-in-law; clubbing of income provisions apply.
It means that any income that you derive from the gift received by you from above three persons will be clubbed in the income of the respective person for taxation.
In your case,
If you put the house bought by you using amount gifted by your father-in-law, on rent, then the rental income will be added to your father-in-law's income.
If you derive capital gain by selling the house purchased using such gift amount, then the capital gain will be added to his income.
Hope your query is sorted out. If you have any more questions feel free to ask.
tme s limted,bt drms r unlmtd
(Mba ( fin.) Ca final Student)
(257 Points)
Replied 20 August 2013
clubbing of income shall be applicable ,when u receive any rent from the house
kirti agrawal
(partner)
(60 Points)
Replied 04 December 2013
Gift in cash or kind from Father in law or mother in law is not Taxable as received from Relatives as
Also, in the following cases, gifts received are not taxable (even if the value is above Rs50,000):
(a) Receipt of gifts from relatives is not taxable. The term “relative” includes a spouse, brother, sister, brother or sister of spouse, brother or sister of either of the parents, any lineal ascendant or descendant of the individual or of the spouse and spouse of any of the persons mentioned above.
sanjay rastogi
(management consultant)
(58 Points)
Replied 20 February 2014
what happens if a man ( husband) receives the gift from his wife's father i.e. father in law??? What abt clubbing then ??
Swami Ayyappa Nuli
(TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER)
(1372 Points)
Replied 20 February 2014
Father of Wife also come under the definition of Relative for this purpose.Hence No taxability. Clubbing provisions will apply as what is replied for above forum by Mihir.
Swami Ayyappa Nuli
(TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER)
(1372 Points)
Replied 20 February 2014
Father of Wife also come under the definition of Relative for this purpose.Hence No taxability. Clubbing provisions will apply as what is replied for above forum by Mihir. So for this purpose Relative means
1)Spouse of the Individual 2)Father or Mother of Spouse and Individual as well 3)Brother or Sister of Spouse and Individual as well 4)Brother or Sister of either of parents of Spouse or Individual 5)Any Lineal Ascendant or Descedant
Ganesh Kumar Khemka
(c.a final and COMPANY SECRETARY)
(123 Points)
Replied 07 July 2014
som sekhar ghosh
(1 Points)
Replied 17 September 2016
Sir, in case I receive gift from father in law, do I need a deed of gift to make it taxfree?
What if my father in law does not have itax return file.
Can o show the amount as a loan and return it thru cheque?
CAclubindia
