The question is whether someone should pay taxes for the financial help I receive? for eg: 1) When relatives or friends or neighbours or political parties or even localities pool on money for the purpose of treatment of a needy or for helping him construct his house (damaged during natural calamities), should the receiver pay tax? 2)When non governmental bodies like charitable organizations or welfare bodies or professional bodies contribute amongst themselves as part of some schemes in the event of death of a member... Is that amount taxable at the hand of the beneficiary? Eg: There are associations like Coir farmer's association. They run schemes for their members wherein payment is given upon death of a member to his nominees IMA (indian Medical Association) runs similar social security schemes... What about them? Do they have exemption under section 10 of IT act ?(akin to life insurance policies)
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Tax implications for beneficiary for the financial help received by him
I have seen people in my area collecting as high as rs. 30 lakh for liver transplant to a guy in my area. You mean to say, the family after receiving the amount, would have to pay some 9-10 lakhs first as income tax before using the remaining amount.
I know ....that must be what the law says. But i can't believe people will collect and give such huge amounts, only to see about 25 % of that going to the govt as tax!!! They must have something to work around this
The option is one can always prefer a public writ petition.
At the same time from Government's point of view' many assessees misusing the way of such collection for converting their own black money.
To plug this loophole the donor based taxation had been replaced with Donee based taxation.
As a result Gift Tax Act was abolished based on many factors.
OK... That's the law
But my question then would be... Financial help is happening... Like for eg: 30 lakhs for liver transplant.... Are the beneficiary families paying tax for this? That's what I want to know
Or are they using some loophole or exemption I do not know of... That's what I need to know
I am not aware of any loophole to avoid .
What if the collected amount is directly transferred to the hospital to settle the dues, rather than first transferring to the aggrieved family?
Bcoz as and when any query is raised by IT Dept, it is the assessee who will have to explain the source of such huge amount of bill. And at that time you won't have any option except to declare truth.
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