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Gift

kapil kumar agrawal (Chartered Accountant ) (169 Points)

06 October 2009

Hii...

One person has received an amount of Rs.100000 from one of his friend, his friend deposited the amount in the bank and he withdrew the amount from bank.... IS such Gift liable to tax ????

Thanks in advance....

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5 Replies

Max Payne (employed) (2569 Points)
Replied 06 October 2009

Offer it to tax.

Gift from friends does not qualify for exemption under the act, and the amount exceeds the limit for non-taxability of gifts. Unexplained credits are also treated as income of the assessee.

If you want to avoid tax, show this money as a loan from the friend, deposit the same in the friend's account as a proof of repayment (or get a stamped receipt). Withdraw it to take the sum out of the banking system and receive it in cash.

Rajeev (www.rkmco.com) (985 Points)
Replied 07 October 2009

Any credit in yr bank will be either income , loan or a capital receipt (gift etc) .

if its a gift , execute a gift deed to that effect , but it will be chargeable to Income tax , since gifts from frnds are taxable .

Show the transcation as it is . dont show it as loan , cos repayment is in cash ( 269T will be attracted )

Sunil (Trader) (2611 Points)
Replied 07 October 2009

Rs.100,000 aggregate gift received from non relatives is exempt only on the ocassion of wedding You will literally have to establish and correlate the gift as being given for wedding. Maybe on same date as wedding itself like how people enter name and addresses of donors giving chandlas during weddings. However if there is no wedding but your source is established like say a gift deed, just include it in your income and pay tax at normal rates applicable to you.

Sunil Liladhar Kotak (Manager (F & A)) (2025 Points)
Replied 07 October 2009

if gift is received from friend in excess of 50,000/- the whole of such sum will be taxable pls refer section

Pls refere to the following clause from the Income tax act

Section 56(vi)

where any sum of money, the aggregate value of which exceeds fifty thousand rupees, is received without consideration, by an individual or a Hindu undivided family, in any previous year from any person or persons on or after the 1st day of April, 2006 ^1a[but before the 1st day of October, 2009], the whole of the aggregate value of such sum:

Provided that this clause shall not apply to any sum of money received

(a) from any relative; or

(b) on the occasion of the marriage of the individual; or

(d) in contemplation of death of the payer; or

(e) from any local authority as defined in the Explanation to clause (20) of section 10; or

(f) 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 clause (23C) of section 10; or

(g) from any trust or institution registered under section 12AA.

Explanation.For the purposes of this clause, relative means

(i) spouse of the individual;

(ii) brother or sister of the individual;

(iii) brother or sister of the spouse of the individual;

(iv) brother or sister of either of the parents of the individual;

(v) any lineal ascendant or descendant of the individual;

(vi) any lineal ascendant or descendant of the spouse of the individual;

(vii) spouse of the person referred to in clauses (ii) to (vi);]

Please ask if u have any further queries in this regards,

Thanks,

sunil