Gift received from relatives-Implications for Tax Purpose

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Alay (Querist)
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10 February 2011 Dear Sir,

Please tell me the answer of below naratted 2 questions :

Que-1) Mr.X,an individual gift Rs. 200,000/-(cash) to her wife Mrs. X(who is Housewife) in the Financial year 2010-11. Then gift recd by Mrs X will be clubbed in the hands of Mr.X ?(for the Tax purpose)

Que-2) Mr.X,an individual, gifts Rs. 250,000/-(cash) to his Major Son Mr.B in the Financial year 2010-11, then income or gift recd by Mr. B will be Clubbed in the hands of Mr.X or will be the income in hands of Mr.B?
--> If Mr.B is Student.(Does not have any other income or income below Rs. 160,000/-)
--> If Mr.B is salaried person.( have income of Rs. 180,000/-p.a.)

Thank you in Advance.

Pankaj Gupta

Pankaj Gupta (Expert)
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11 February 2011 Ans to Q no. 1. The gift received by Mrs. X will not be clubbed in the hand of Mr. X as Mr. X himself has given the gift and gift given to wife is permitted under Income tax act. Further, any Income from that gifted money shall be clubbed in the Hands of Mr. X. However income from income shall not be clubbed eg if Mrs x invest the money in FDR the interest earned on Rs 2,00,000/- shall be clubbed in the hands of Mr. X and any further income on interest receive on interest shall be taxed in the hands of Mrs. X.
Ans to q 2. If his son is major then gift received by son will not be taxable in any hand. Income from gift will be taxable in the hands of major son only in all the case

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Alay

Alay (Querist)
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13 February 2011 Dear sir,

Thank you for Reply, but I am Confused about above answer-2 that you have given ;
-> You have told in Answer to Que-1 that "any Income from that gifted money shall be clubbed in the Hands of Mr. X. "(in reference to Mrs.X)

-> And in Answer to Que-2, You have told that "Income from gift will be taxable in the hands of major son only ,in all the case ".

Why this discrimination between wife & Major Son? I mean,It may be written in I.Tax Law but I want to confirm it.

And Sir,I want to ask further in realtion to Que-1 is that; If Mrs. X is applying in IPO & if she sells alloted shares (say for an example 25 shares) & earn Short Term Capital Gain(STCG).

Then Is this STCG will be clubbed in the hands of Mr. X or will be treated as income of Mrs.X ?

Please Reply.
Thank you in Advance.

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Pankaj Gupta

Pankaj Gupta (Expert)
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14 February 2011 In computing the total income of any individual, there shall be included all such income as arises directly or indirectly to the spouse of such individual from assets transferred directly or indirectly to the spouse by such individual otherwise than for adequate consideation or in connection with an agreement to live apart.

Act is silent about major son.

The Income from STCG will be taxable in the hands of Mr. X only if mrs. X applied the gifted money.

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