Cash Received from Relatives for rotation (short period)

This query is : Resolved

Guest

Guest (Querist)

09 October 2009 A is an individual.

A receives cash Rs.50000/- from his relative B and this amount is interest-free. (A deposits the cash Rs.50000/- in his bank account).

B paid cash out of B's savings.

B has no income at all.

B does not have a bank account and B is a senior citizen.

Is there any non-compliance with regard to the above transaction ?

If so, necessary IT provisions on the matter may be furnished, please.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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09 October 2009 You are violating 269SS where loan has been taken above rs.20000/- which attracts penalty.

Rajeev

Rajeev (Expert)
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10 October 2009 269SS attracted .

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Guest

Guest (Querist)

10 October 2009 In continuation of the query raised by me, I would still require some more clarification.

Suppose, A and B are relatives.
That is, B is father and A is son.

B paid cash Rs.50000/- to A (and already, it was deposited by A in his bank account).

Now, to find a solution to the transaction in a proper manner, can the transaction be treated as a GIFT from FATHER to his SON.

I am sure, the GIFT from FATHER by cash of Rs.50000/- to SON is permissible under the Income Tax Act and hence, the deposit of Rs.50000/- by SON in his bank account does not have any impact.

Can you please confirm the transaction is valid, if such a stand is taken ?

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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10 October 2009 The above method is correct if both the father and son agrees for the same. As per law its ok. But family atmosphere also has to be considered.

Ratan Sharma

Ratan Sharma (Expert)
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10 October 2009 There will be no problem if the gift is accepted. But plz remember that onus of proof is on assessee to prove that the transaction is genuine and the person making the gift has so much worth to give the gift. Otherwise the gift will be added to the income of assessee.