Payments to relative
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 December 2011
What income tax law says while sum given to relative like father to spouse & to children s? & vice-versa ? & taxability of income generated from such receipts ? i.e. in whose hands income tax will be payable ?
10 December 2011
Sec 40a 2 b of income tax act
As per the provisions of this section any payment made by an assessee to any of his ‘Relatives’ in respect of any expenditure is disallowable to the extent it is considered excessive, or unreasonable, having regard to the market value of Goods or Services or Facilities etc.
Here the following definitions need to be considered for better understanding:
‘Relative’ is defined to include Husband, Wife, Brother, Sister or any other Lineal Ascendant or Descendant
As per the provisions of this section any payment made by an assessee to any of his ‘Relatives’ in respect of any expenditure is disallowable to the extent it is considered excessive, or unreasonable, having regard to the market value of Goods or Services or Facilities etc.
Here the following definitions need to be considered for better understanding:
‘Relative’ is defined to include Husband, Wife, Brother, Sister or any other Lineal Ascendant or Descendant
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 December 2011
but in whose hands income tax will be payable
if that money invested in e.g. in fixed deposit ? & amount given say 50000 to children(major)?
if that money invested in e.g. in fixed deposit ? & amount given say 50000 to children(major)?
10 December 2011
ILLUSTRATIONS.. For Your better understanding
Mr. X transferred an asset worth Rs. 15, 00,000/- to his Elder sons’ wife without any consideration, income earned from such asset will be taxable in the hands of Mr. X.
Mr. X transferred an asset worth Rs. 15, 00,000/- to his Elder sons’ wife without any consideration, income earned from such asset will be taxable in the hands of Mr. X.
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