Cash deposited into bank

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2017 There is an addition on account of cash deposit of Rs. 1882000 into bank. Now our case is before CIT A. On what grounds we can save our client. Assessee has actually borrowed money from his relatives in cash in year 2013-14.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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29 May 2017 You may file confirmations from relatives regarding the amount borrowed. You will have to prove genuineness, creditworthiness and identity of persons from whom it is claimed to have been received. You may also file balance sheets and ITR of the relatives if they are tax payers and mention their source of earning.

Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2017 Can we take amount from relatives more than Rs. 20000 in a year from one person

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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18 July 2024 Yes, you can receive money from relatives without any limit under the Income Tax Act, 1961 in India. There is no restriction on the amount of money you can receive from relatives as gifts, and it is not taxable as income in your hands. Here are the key points to consider:

1. **Definition of Relatives**: Under the Income Tax Act, relatives are defined broadly and include:
- Spouse
- Brother or sister
- Brother or sister of spouse
- Brother or sister of either of the parents
- Any lineal ascendant or descendant
- Any lineal ascendant or descendant of the spouse
- Spouse of the persons referred to above

2. **Exemption from Tax**: Any amount received from these relatives as a gift is exempt from income tax. Therefore, whether you receive Rs. 20,000 or more from any relative in a year, it will not be considered as taxable income.

3. **Documentation**: It's advisable to keep records of such gifts received, including the amount, date, and relationship of the donor, for your own records. This can help in case of any future scrutiny by tax authorities.

4. **Other Sources**: Be mindful that gifts received from non-relatives (e.g., friends, colleagues) exceeding Rs. 50,000 in a year are taxable under certain circumstances, unless received on specific occasions like marriage or inheritance.

In summary, there is no restriction on receiving amounts from relatives in a year under Indian tax laws. Gifts from relatives are tax-free, regardless of the amount, but maintaining proper documentation is always recommended for clarity and future reference.