RECEIVED CASH GIFT ON ENGAGEMENT

Dear Saqib,

if you have received in cash then deposit in bank in part or create FD of Rs. less than 2 Lakhs with the banks (more than 1).

on enquiry you will need to produce details of person who has gifted you like PAN address etc. for which he may be taxed. if you dont want this then show it as business income or income from other sources and pay the tax on it.

Regards

Hitesh

Gift received on the ocassion of marriage of the individual is exempt from tax u/s 56.

You have to prepare list with address and PAN from whom you received cash gift.

In addition to Hitesh reply:

U have pay Gift Tax, U/s 56(2)vii, on it. As money above Rs 50000/- has been received. Your in-- laws r not ur relative nor gift is receive on the occosion of Marriage, so execption to this section is not covered.

yes quite a intersting case... Agree with Ashish.

Just to avoid this tax dont deposit in SB account... make FDs in different banks of less than 50k or else it wil be traxcked in Audit.. and deposit some amount in your bank account...

They are not your in laws as of now....so it will be taxed

To avoide Tax.

u can do it by two ways:

1. Don't consider it as Gift now. After Marriage consider it as gift on the occosion of marriage. 

2. Consider it as advance for marriage expenses or rembursement of marriage expenses. It is tradition in Indian Culture that marriage expense is borne by Bride's side. so u can easy satify the IT officer.

Ashish: do you know if they consider it as marriage exp according to indian culture than it will be violation of Law and will be held in Dowry case.... 

Dear Shivang,

Dowry is demand by Groom or grooms family in cash or kind. Where as Marriage expenses is actual expenses towards marriage such as Food, loading, boarding, catering, etc

In India it is tradition that expenses are borne by Bride's side. It is Hospitality provide to Groom & to its kith & kin. It is not illegal.

Ashish:  Can you  please give me section of the ACT where it is mentioned that it is tradition in India and its hospitality....

Or any case laws regarding the same.... It is INCOME TAX and not general knowledge stuff... Here the ACT talks...

Dear Shivang,

Act is silent about this. When act is silent about any thing then the Common paralance is used.

There is case which has decided that expenses which r Tradional in nature is allowed, will cite the case name afterwards.

But here expense is personal in nature, which is disalowed any way.

Our focus point was how to avoide gift tax.

Agree with Jagdishjee.

Gift on the occasion of marriage is exempt. Identity of the doner is to be established. Thats all.

Neighter gift applicable nor it is a dowry.

Best wishes for your marriage.

Dear Shyam,

CASH GIFT IS RECEIVED ON ENGAGEMENT.

DON'T CONFUSS MARRIAGE WITH ENGAGEMENT.

It is cash gift received on occassion of engagement and not marriage. Cash gift received by an individual from relatives on any occassion is exempt. Relative includes brother in law as well as sister in law. So incase if this cash gift is received from these peope then exempt.

I think in India Gift Tax is demolished and respectively changes are made in Section 56 of IT Act.

If I am wrong please correct me as I have forgotten all provisons of IT Act.

1st thing that needs to be considered is that in law's become realitives after marriage and not by engagement. and gift received by an individual from other than relatives and on ocassions other than those specified shall be taxable. various options as discussed could be considered for the purpose of tax planning.

the best being that you show the gift received on engagement later on as gift recd on marriage as it is given an out right exemption.

as far as depositing the cash into bank goes, for such hi-value cash transaction, source of funds shall have to be disclosed in detail as per guidelines.

Also, various expenses need to be paid off in cash for marriage purpose. so, the said cash may be usefull for the same.