gift tax

Hi Sir,

From tax point of view not a good idea..............

Since nephew in ur case is not covered in the definition of "Relative" any any gift will be taxable in his hand u/s 56 based on the Fair Market Value on the date of transfer.

The above FMV will be taxable as normal income as per his slab.

Options for you -

1) If ur nephew is not already married then keep this gift for his marriage - then it will not be taxable.

2) Indirect transfer - First from u to ur Brother -in -Law & then from him to his son - then income tax will excuse you {but in this case Stamp duty will be levid twice}

3) Transfer by way of ur will - in that case also income tax will not be levid.

Stamp Duty - it is levid when transfer deed is registered. so will have to pay in all cases but twice in case of indirect transfer.

HI Sir,

Sincere apologies for posting an incorrect reply earlier....

I misread the definition of "Relatives".

Ur nephew falls very much with in the definition of the term & hence any gifts made to him on any occassion will be tax exempt.

“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);]

The new rule for gift tax

The change in the rule related to gifts says that the receiver has to pay tax for receiving any gift valued at Rs 50,000 and more.

The 'any gift' clause means that not only cash but all gifts of any value. So if someone receives a gift of a house worth Rs 30 lakh (Rs 3 million), then he/she is automatically in the highest income bracket and has to pay 30% + surcharge on value of the house as tax (close to Rs 10 lakh (Rs 1 million) in this case).

The rule thus effectively prevents money laundering in the guise of high value gifts.

hey amir i got my doubts on this one.....

is this definition of relative for the person giving the gift or the person receiving the gift.

because in your case, i think that its from the point of view of the person making the gift, so an uncle cannot gift his nephew but for the nephew his uncle is a relative (point iv).

hope u got what i wanted to say.....please clarify.2

Hi Sumit,

U r bang on with ur understanding........:)

This was the only reason behind my first post, I thought it from the angle of person giving gifts instead of person receiving gifts.

So if we reverse the present case then gifts made by nephew to his uncle will be taxable..

A funny situation, isnt??.........:) but that is law, for us, has to read literally........

thanks a lot.....

Hi Amir

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

1 Who are those coming under this clauses?

2 Gift Received from neice an NRI by way of transfer to bank a/c what are the documents proof required?

Dear all,

I have received gift from my brother-in-law of Rs.1000000 is it taxable?.