Taxation of Gift

Gift recieved only in monetary terms is taxable.

yes m satisfied with atul sir ... he is right ....

Mr. Darsh*t,

As Mr. Atul has told, Gift received in monetary  terms, the aggregare value of which exceeds Rs. 50,000 is taxable.

Regards,

Vijay Kumar

The Accounting Treatment for Gift received in monetary terms is as like receipt entry,

Dr. Cash/Bank account

Cr. Gift Account.(under other Incomes)

Gifts in kind are not taxable. Entry can be passed as per under

If the value is known:

Asset    Dr.

   To Capital A/c

If the value is not known; the entry may be passed for a notional value or the estimated value or a value approved by a valuer.

 If  Assessee is a salaried person & he/she has recd. gift in kind from a Non F.B.T Employer then the gift in kind is exempt upto Rs. 5000/- (balance is taxable) in the hands of employee. &

If the gift in kind is recd. from F.B.T employer then it is not taxable for an employee.. 

1.As per sec. 56(2) of I T Act, 1961 Gift recd. in money is taxable. above Rs. 50,000/  gift recd. from relatives as defined in this sec  is totally exempt . In kind is exempt from tax.

2.Gift is forming the part of Capital, It is not a income. It can be taken income only for I T purpose . Hence the entry can be pass in the following manner :

Dr.  Cash/ Bank/ Property ( Movable or Immovable )

Cr. Capital A/c

In narration it can be mentioned : Gift recd. from...........

Surana, Chennai

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