Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Gift Tax Exemption Under head of "Relatives" Sec 56(2).

1080 views 6 replies

Anand Bali

9 Points Posted on 10 February 2022

How a lineal ascendant or descendant of the individual are defined during Income Tax assessment of an individual ? Can a gift given by Uncle of spouse (Husband) is considered as definition of "Relative" during Income Tax Assessment of an individual; where the Uncle is a Senior citizen spinster having no family of his own, living with his elder brother, Nephew and nephew's wife in same residence since long and has given his portion of house as a gift to the wife of his nephew. Pl advise.

Replies (6)

Quick Summary

Under Section 56(2)(x) of the Income Tax Act, gifts from specified �relatives� are exempt. �Relatives� include lineal ascendants/descendants and certain defined relations, but uncle-in-law of spouse is not explicitly covered. Therefore, a gift from spouse�s uncle may not qualify for exemption and could be taxable depending on facts.

sabyasachi mukherjee

Profession Business

28207 Points Posted on 10 February 2022

Read Sec 56(2)(x)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211682 Points Posted on 10 February 2022

Yes, he will be relative as per the sec. 56(2) of IT act..

Anand Bali

9 Points Posted on 10 February 2022

Pl support your answer with a citation in favour of assessee.

Anand Bali

9 Points Posted on 10 February 2022

Dear Mr Dhirajlal Rambhia, it is not the nephew but his wife is the recipient of the Gift from her husband's Uncle please note Thus it is not HE but SHE.... Please reconsider your answer and in case you have any answer favoring the Assesse please cite the same clubed with the suetable citation for it.

Please consider it as an Urgent matter for the current financial year.

With Regards !!

Adv. Anand Bali

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211682 Points Posted on 10 February 2022

Yes, you are correct, she is not directly related to the uncle-in law, but we gift it twice, first to her husband/ FIL then to wife/DIL.. In that scenario it can be exempt.

Anand Bali

9 Points Posted on 20 February 2022

Mr Dhirajlal ji, it is not the question of Gifting it now; it is the question that if the Gift is made to the Nephew's wife by the Uncle what are the implications of Tax on it? Does it come under the exemption list or not ??? Here the Gift is already made and done with.

If you have the answer to it pl suggest?

In your above suggested answer where the Gift was supposed to be given to the wife of Nephew and you have suggested that Two steps Gift be made routed through her husband will also attract DOUBLE Govt. Stamp duty for it's registration which you please note.