Gift deed

This query is : Resolved

padmanabham (Querist)
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19 January 2017 I am a retired employee who likes to make a cash gift to my wife.what are the terms and conditions in respect of the gift deed and relevant tax provisions for the above.whether gift deed to be registerd or not if so what are the rules please.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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27 April 2017 Though under section 56 you can make gift of any amount in cash since gifts received by wife are exempt being relative. But with the introduction of section 269ST you can only make cash gift of less than Rs 2 Lakhs otherwise recipeint ie. wife will invite penalty u/s 271DA. For cash gifts deed is not compulsory but may be prepared for record purpose. Another thing is that if wife invests this gift in some income generation than by virtue of section 64 the income shall be clubbed with husband income. For example if she makes FDR out of it and earns interest on it than interest income will be clubbed with the husband's income.