Donation Income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 January 2011 Please tell whether donation received by an individual is taxable? is there any case where donation received are exempt?

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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17 January 2011 I wish to start the answer with light humour :

The persons who receive "Donations" in their individual capacity are called as beggars !

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Although the person who gives "Gifts" is known as the Donor and the Receiver is known as the Donee.

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Persons who receive donations as such are taxable under the head INCOME FROM OTHER SOURCES.

Beggars can't say that they run their own business or profession.

Hope the matter is clear.

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Humour (This one is not light alike above):

Abhi Jata Hu, Line Bahut Badi Hai Mere Dost !

( Sabhi Ko "Free" Me Answer Jo "Dene" Hai).

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A request : please don't take it "otherwise."

( Ye to badi sidhi baat hai).

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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17 January 2011 PS :

1. Gifts received from relatives are exempt.

( Keep your relations up-to-date with the relatives. See how law also helps to maintain such relations).

2. Marriage gifts are also exempt. ( Balle-Balle ).

(Hence don't follow live-in relationship - you may lose this fabulous opportunity).

3. Gifts received through a will is also exempt.

( Kisi ka mar-na it-na ich-chha ho sakta he kya )!

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Querist : Anonymous

Querist : Anonymous (Querist)

17 January 2011 Sir,
first of all thanks for your humour.
Here is the case where the assessee received donation from some institution for his medical treatment and this amount is not repayable otherwise so we cant book as loan. That is why i asked whether is there any relief for the same.

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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17 January 2011 So as mentioned above by Rakhecha sir, only three income are exempt :

Gifts received from relatives are exempt.

Marriage gifts are also exempt. ( Balle-Balle ).

Gifts received through a will are also exempt.

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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17 January 2011 OH !

REALLY VERY SORRY TO KNOW ABOUT THIS CIRCUMSTANCE.

I presumed that someone is asking this question just for curiousity and that is why I answered in this form because many times it is asked at caclub in this manner.

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Now I will try to answer the query from deep of my heart :

1. Income-tax is levied for the purpose of social welfare.

2. The income of charitable institutions are exempt from tax for the reason mentioned in point no. 3.

3. Those who get help from such institutions are not taxed because concept behind is that needy and poor should be taken care of.

4. Amount received towards medical expenditure is not an income at all.

5. One may argue to that it in INCOME FROM OTHER SOURCES. This is not true because one cannot claim to have income due to illness.

6. Even over Assessing Officer will not tax such amount ( Really it is so).

Regards.......Dil se.