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Do parents have to declare gift given by son in their ITR exempt income or not required?

anonthink (Individual) (38 Points)

29 March 2025

Let's say a son gifts his parents 15L through bank transfer.

When parents file ITR, do they have to add 15L in Exempt income?

I am getting different views. One video (link below) said that we don't have to declare it anywhere in ITR (parents side ITR)

https://www.youtube.com/watch?v=UgYnO80XvNg&ab_channel=ExpertCASachin%28FinancialEducation%29

Looking forward for your views.

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2 Replies

Rama chary Rachakonda (Master in Accounts & high court Advocate) (8626 Points)
Replied 29 March 2025

When the parents receive the gift of ₹15 lakh from their son through a bank transfer, they are not required to add this amount to their exempt income in their Income Tax Return (ITR).

Gift from a Relative: - *Tax-Free Gift*: Gifts received from relatives, including children, are exempt from tax under Section 56(2)(vii) of the Income-tax Act, 1961. -

*No Reporting Required*: Since the gift is tax-free, the parents are not required to report it as exempt income in their ITR.

Supporting Reference: The video you shared from ExpertCA Sachin (Financial Education) accurately explains that gifts from relatives, including children, are exempt from tax and do not need to be reported in the ITR.

Krishnamurthy B. (VP - S/w Architecture (Retd)) (99 Points)
Replied 18 July 2025

About Non-taxable receipts not needing to be shown in Sch EI (Exempt Income), my view is that all other Incomes shown in Sch EI (Exempt Income) are also not taxable. Yet, some of these incomes are specifically asked to be shown under Sch EI to avoid any mismatches between our Receipts info obtained by IT Dept from other sources, and our ITRs.

Other non-taxable receipts, though not required to be shown, CAN be shown here, it doesn't harm to show them, and it could be helpful in certain circumstances if shown.

Reason : If we ever get picked for Scrutiny or Audit by IT Dept where they check our ITRs against credits to our Bank Accounts, such undeclared Receipts will initially get flagged as "Unexplained Receipts" and suspected to be "Undeclared Income" until we can explain source and purpose of the receipts and prove that they were legal & not taxable... Such an audit may occur several years later... So we have to remember reasons for all such Receipts !!

Showing non-taxable Gift receipts in Sch EI under Item 3-"Other Exempt Income", with "Nature of Income" = "Other", and Descripttion set to something like "Gift from Son / Other Relative / On Marriage / Birthday", etc., helps in above situation because :

First off, it shows the Received Amounts in an ITR; so all charges of "Undeclared" or "Unexplained" Income during a Scrutiny or Audit becomes untenable. So, they are not likely to get flagged...
Second, it helps us to remember the source & reason for the Receipts if still asked about them years later !!
If one is required to fill Sch AL (Asset-Liability), it's all the more useful to show all exempt receipts in Sch EI... Avoids showing an increase in Assets beyond Income, which could invite picking up for Scrutiny.

So, in my family, we have been declaring all Gifts received from our sons, parents, and other close relatives via Bank Transfers in our ITRs under Sch EI for the past several years, and have never faced any issues...

Just my 2 cents...