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Gift to mother-

S Nagar (Finance Professional) (76 Points)

31 January 2013

I had transferred Rs 20 lacs to my mother last year. She created an FD form that amount which has now get matured. I need the money now to pay for my housing loan installment. If my mother transfers back this money to my account ( 20 lacs + interest earned on FD) , what will be the taxability of this amount in my hands. Are there any affadavits required for the gift

Thanks

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9 Replies

CA Jatin Kacha (Chartered Accountant) (230 Points)
Replied 31 January 2013

Any person can give gift to his/ her relative. it is exempted. You can gift your mother any amount and even your mother can gift you any amount. It is exempted under income Tax act. It is advisable to you that you should have some documentory proof for such gift.

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S Nagar (Finance Professional) (76 Points)
Replied 31 January 2013

@ CA Jatin -

What kind of documentary proof is required ? I had transferred money through cheque which is reflected in my bank statement. Is there any specified format to declare that the money has been transferred as gift ?

thanks

Vaisakh Ayyappan Prakash(VAP) (student) (474 Points)
Replied 31 January 2013

(a) Receipt of gifts from relatives is not taxable. The term “relative” includes a spouse, brother, sister, brother or sister of spouse, brother or sister of either of the parents, any lineal ascendant or descendant of the individual or of the spouse and spouse of any of the persons mentioned above.
(b) Receipt on the occasion of marriage. It is customary to receive gifts of money and in kind on the occasion of marriage. Therefore, this is a welcome exception to the general rule.
(c) Receipt under a Will or by way of inheritance or in contemplation of death of the payer.
(d) Receipt from a local authority as defined under the Act.
(e) Receipt from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution specified under the Act.

It is pertinent to note that while there is no tax on gifts under the aforesaid circumstances, the revenue authorities will be within its powers to treat even such unexplained or unproved gifts as cash credits. It would, therefore, be prudent to maintain documentary evidence (such as a gift deed/letter of understanding) in respect of gifts received, to avoid any dispute with the revenue authorities at a later stage. This is particularly relevant in cases where the gift amount is substantial and also where it is received from relatives.

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pratik agarwal (CA Final) (62 Points)
Replied 31 January 2013

you should execute a gift deed..

Pratik (XYZ) (128 Points)
Replied 31 January 2013

Pls find attached a sample of gift letter which you can use.

Attached File : 730304 1125398 gift letter format.doc downloaded: 214 times

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S Nagar (Finance Professional) (76 Points)
Replied 31 January 2013

@ Pratik - Thanks for sendig the format for the gift letter. Does it need to be executed on a stamp paper and also notarised.

Pratik (XYZ) (128 Points)
Replied 31 January 2013

Originally posted by : S Nagar
	@ Pratik - Thanks for sendig the format for the gift letter. Does it need to be executed on a stamp paper and also notarised.