Hi All,
I have recieved a gift of 20,00,000 from my sister. I know that it is not taxable under the gift tax act (since she is a relative of mine). I am an unemployed person.
My query is.
1) Will the income tax be deducted from the Rs 20,00,000/- that is in my account?
Or
2) Will the income (such as FD) generated from that 20,00,000/- taxable and my 20,00,000/- remain unchanged as it is?
Your query is not very clear.
1. No tax is payable in case of the gift as it is from a relative. So no income tax to be deducted.
2. Any income accruing from the amount received as gift invested somewhere like in your case in FD then any accruals or interest on the same will be taxable. The principal amount received on maturity of FD will again not be taxable.
Hi Anand,
thanks for a prompt reply. My query was if that 20 lac rupees will get reduced due to income tax every year or not.
If i put it in a savings account and the interest crosses 1.6 lakh then i will pay tax on that amount na?
My name is Aditya not Anand.
Tax is payable on income. So you would be earning interest income of above Rs. 160,000/- and then tax will be payable. So Rs. 20 lakhs will not reduce.
Eg: you deposit Rs. 20,00,000/- in bank account and receive Rs. 200,000/- as interest. So your bank balance will become Rs. 22,00,000/- and tax payable will be Rs. 4,120/- (including education cess). So after paying the tax your bank balance will become Rs. 2,195,880/-. So nowhere your gift gets reduced.
I have agreed n veiw of CA Aditya
Regards,
CA Kailash
sorry for the mistake in name aditya. Thanks for the clarification. I assume similar would be case with FD.
for example if i FD 20,00,000/- at 10% ROI for 365 days. The interest would be 2,00,000 and hence the tax would be on 40,000 Rs/-
CAclubindia
