gift of money is it taxable
Nimesh Laxman (6 Points)
24 September 2017
If one has been gifted an xyz sum of money by family members is it taxable or not. Please advice
6 Replies
sanjay
(student)
(27 Points)
Replied 24 September 2017
No. if the family member falls under the defination of relative as per section 2(41) of the IT act then any sum recievable from him or her as gift is not taxable
RAJA P M
("Do the Right Thing...!!!")
(128106 Points)
Replied 24 September 2017
Yes. I agrred to Mr Sanjay...
It's to family members not taxable...
Definition of ‘Relative’ – Income Tax
As per S. 2(41) of Income Tax Act, 1961, unless the context otherwise requires, the term “relative”, in relation to an individual, means the husband, wife, brother or sister or any lineal ascendant or descendant of that individual.
Its important to understand the meaning of term ‘relative’ in the context of Income Tax Act/ Rules as there are many circumstances where disallowances or certain tax liabilities have been stipulated under difference IT Sections/ Rules, which may occur due to transactions even with a relative.
chamarthi venkatesh
(Student CA Articleship)
(848 Points)
Replied 25 September 2017
If the family member you are saying falls under these relatives, then the gift is exempted
-
Spouse
-
Brother or sister
-
Brother or sister of the spouse
-
Brother or sister of either of the parents
-
Any lineal ascendant or descendant
-
Any lineal ascendant or descendant of the spouse
-
Spouse of the person referred to in points 2 to 6
lineal ascendant means parents, grand parents, great grand parents
lineal descendant means sons, grand sons and great grand sons
chamarthi venkatesh
(Student CA Articleship)
(848 Points)
Replied 28 September 2017
There is no exemption limit for gift from relatives. It is completely exempted
Sreelalu Krishna
(25 Points)
Replied 28 September 2017
Section 56(2)(vi) provides that any ‘sum of money’ (in excess of the prescribed limit of `50,000)
received without consideration by an individual or HUF will be chargeable to Income Tax in the
hands of the recipient under the head ‘Income from Other Sources’.
However, receipts of money (a) from relatives or (b) on the occasion of marriage or (c) under a
will or inheritance or (d) in contemplation of death of payee or donor are outside the scope of the
provisions of Section 56(2)(vi) of the Income-tax Act.
Similarly, anything which is received in kind having ‘money’s worth’ i.e. property is also outside the
received without consideration by an individual or HUF will be chargeable to Income Tax in the
hands of the recipient under the head ‘Income from Other Sources’.
However, receipts of money (a) from relatives or (b) on the occasion of marriage or (c) under a
will or inheritance or (d) in contemplation of death of payee or donor are outside the scope of the
provisions of Section 56(2)(vi) of the Income-tax Act.
Similarly, anything which is received in kind having ‘money’s worth’ i.e. property is also outside the
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