Income Tax On Gifts and who are a Relatives

Gift is something we all like to get from a desired once though are we wakeful about a taxation implications on a same. Under Income Tax Act 1961, there are many manners on receiving gift  formed on a inlet of a present and from whom a chairman has perceived a gift. As per income taxation act, present perceived in a form of cash, determined property, shares securities, jewellery, archaeological collections, drawings, paintings, sculptures or any work of art surpassing Rs. 50,000 from 01.04.2006 (Rs. 25,000 from 1.9.2004 to 31.03.2006), from any chairman is reprehensible to taxation underneath a conduct “Other Sources”, theme to following exceptions:

  • Gift perceived from certain kin (as tangible in a section),
  • Gift perceived on arise of matrimony of a individual,
  • Gift perceived underneath a will or inheritance,
  • Gift perceived due to a genocide of a payer.

Lets have a closer demeanour on a taxation implications on receiving present from your relatives, non kin and others.

Gifts Received From Relatives

As per a Income taxation act, a tenure “relatives” is described in detail. As present perceived in a form of cash, coupon or good from your relations is entirely free from tax. So if we accept a present income from any of your kin listed below, we are not probable to compensate any taxation on a same.

  • Father or Mother of a individual
  • Brother (Bhai) or sister (Behin) of a individual
  • Son (Beta) or daughter (Beti) of a individual
  • Grand son (pota) or Grand daughter (poti) of a individual
  • Spouse of a particular i.e father (pati) or mother (patni) of a individual
  • Sister’s Husband (Jija) or Brother’s Wife (Bhabhi) of a individual
  • Brother (sala) or sister (sali) of a associate (Wife) of a individual
  • Brother (dewar) or sister (nanad) of a associate (Husband) of a individual
  • Brother (Mama) or sister (Mausi) of a Mother of a individual
  • Mother’s Sister Husband (Mausa) of a individual
  • Wife’s brother’s mother of a individual
  • Father’s Brother (Chaha or Tau) of a individual
  • Father’s Brother’s Wife (Chachi or Tai) of a individual
  • Father’s Sister’s Husband (Fufa) of a individual
  • Father’s Sister (Bua) of a individual
  • Grand Father (Dada) or Grand Mother (Dadi) of a individual
  • Great Grand Father (Pardada) or Great Grand Mother (Pardadi) of a individual
  • Daughter’s Husband (Jawai) of a individual
  • Son’s Wife (Bahu) of a individual
  • Wife’s Father (Sasur) or Wife’s Mother (Saas) of a individual
  • Husband’s Father (Sasur) or Husband’s Mother (Saas) of a individual
  • Wife’s Grand Father (Dada Sasur) of a individual
  • Husband’s Grand Mother (Dadi Saas) of a individual
  • Husband’s Grand Father (Dada Sasur) of a individual
  • Wife’s Grand Mother (Dadi Saas) of a individual
  • Wife’s Great Grand Father (Bade Dada Sasur) of a individual
  • Husband’s Great Grand Mother (Badi Dadi Saas) of a individual
  • Husband’s Great Grand Father (Bade Dada Sasur) of a individual
  • Wife’s Great Grand Mother (Badi Dadi Saas) of a individual
  • Brother’s Wife (Bhabhi) of a individual
  • Mother’s Brother’s Wife (Mami) of a individual
  • Husband’s Brother’s Wife (Devrani or Jithani) of a individual
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For Example, if we get a present income of Rs. 50,000 from your Uncle ( Your Father’s brother), it is entirely free from a taxation as your uncle comes underneath your kin as per a income taxation settled list. So from now if we accept any income from any of your relations ( As per Income taxation law) afterwards cannot get any taxation weight for a volume of present income received.

(Note : There is no taxation on income perceived from Relative, either they live in India or not (NRI). All Gift from kin are exempted.)

Gifts perceived from non-relatives :

As per income taxation law who so ever doesn’t come underneath a above mentioned propinquity are called as non-relatives for you. Even in this box we get taxation grant on a present perceived though with an exception. If we accept present in a form of cash, coupon or bank breeze afterwards there is extent of Rs 50,000. Which means if we accept any present in a form of cash, coupon or bank breeze afterwards we are free upto a extent of Rs 50,000, we will be probable to compensate  gift taxation usually if present volume exceeds this limit. Which means any volume above Rs. 50,000 will lift present taxation guilt on you. But if a perceived present is not in financial form afterwards we are entirely free from a tax.

For example, if we accept a automobile in present from one of your crony afterwards it is not entrance underneath a taxation guilt i.e gift tax. But, if we accept a present of Rs.90,000 (cheque) from a crony afterwards we are probable to compensate present taxation on Rs 40,000 ( 90,000 – 50,000).

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Marriage gifts :

One of a special present from income tax, any present perceived on matrimony is entirely free from tax. There is no condition on financial extent trustworthy to this exemption.

Special Tax Exempt gifts :

The following list of gifts are entirely exempted from Tax either a it is perceived as Cash, or any other form of a element doesn’t impact a exemption.

  • Gift perceived underneath a Will or by approach of inheritance
  • Gift in speculation of genocide of a donor;Gift from any internal authority
  • Gift from any account or substructure or university or other educational establishment or sanatorium or any trust or any establishment referred to in Section 10(23C)

Gift from any trust or institution, that is purebred as a open free trust or establishment underneath Section 12AA.

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