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GIFT TO UNCLE

CA SUDHIR HALAKHANDI (PRACTICING CHARTERED ACCOUNTANT) (13196 Points)

04 January 2009

IF X WANTS TO GIVE A GIFT OF RS.5 LAKHS TO THE UNCLE I.E. BROTHER OF HIS FATHER. IS IT TAXABLE IN THEHANDS OF HIS UNCLE OR NOT? THE CLEAR QUESTION IS THAT UNCLE (BROTHER OF FATHER) IS INCLUDED IN SHICH CATEGORY UNDER SECTION 56 OF THE INCOME TAX ACT 1961

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8 Replies

CA CHINTAN AJMERA (Chartered Accountant) (2987 Points)
Replied 04 January 2009

yes it is taxable in the hand's of uncle

CA. Amit Daga (Finance Controller CA. CS. CFA. CIFRS. M.COM. ) (9017 Points)
Replied 04 January 2009

No Brother of father is not includable under sec 56 of the it act

(Guest)

clause of Sec 56(2)(vi) does not apply to amount recieved from relative...and relative includes brother or sister of the parents of the individual.hence it is not taxable in the hands of uncle.

CA. Rajeev Aggarwal (Chartered Accountant) (3419 Points)
Replied 04 January 2009

Yes, not taxable in the hands of uncle

CA SUDHIR HALAKHANDI (PRACTICING CHARTERED ACCOUNTANT) (13196 Points)
Replied 04 January 2009

Dear Friends

In section 56(2) (iv) the list of relatives is given and according to it Brother or sister of either of the parents is relative but here the gift is received from the Son of Brother i.e. the taxability has to be seen in the hands of Donee i.e. the uncle.

The Brother of the father is a relative hence the gift received from the Uncle is not taxable but what happened if the gift is given by the nephew and received by the uncle. Is the reversal of the relatives is also hold good here?

Still I am not sure that it is taxable but I am facing this question . Please Guide.

Anything can help from Lineal accendent or descendent ?

- CA SUDHIR HALAKHANDI

1 Like

SUBHASH KUMAR JAIN (CA) (31 Points)
Replied 19 April 2011

Reply given by Raja is more tenable as the section 56(2)(vi) defines who are relatives, it does not speak who to gift to whom. Where Uncle and nephew are relatives as per the defination the gift can be made vice versa and shall not be taxable.

SURANA (PROPRIETOR) (515 Points)
Replied 15 March 2012

"Section 56(2)(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, the whole of the aggregate value of such sum

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

(iv) brother or sister of either of the parents of the individual......"

Hence receiving Gift from Uncle is not taxable.

but it doesnt say about receving gift from SON OF BROTHER... so receiving gift from NEPHEW would not be tax-free.

Section talks about receving and not giving... so defining vice-versa would be difficult.