One of my client is a grandfather and he has given Gift of Rs. 10lacs cheque to his grandson who is 2year old can u tell me what will be the tax effect on this and what documents should be neccessary for preparation of this.
04 January 2010
No Taxability in the hands of Grandson.
Section 56(vii) says that receiving Cash or Kind gift from the relatives will not be taxable in the hands of Individual and Grandfather covers under relative defination as given above section, therefore no taxability.
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