Tax on gift money

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2011 Dear CA Club, First of all appreciate your wonderful work. One financial question I am seeking to be answered:

My wife is a house wife having PAN card, so she doesn't need to file income tax return. If my father gifts money upto 1.70 lakh to my wife without a gift deed by cheque, should this money be taxable for any one of them. My father has income from agriculture and private teaching (not a legal proof of income). He doesn't have PAN card. As per my understanding, since the money is less than 1.90 lakh she doesn't need to file IT return. Is it mandatory to file IT return any one of them? Please clarify if any tax liable and help.

Warm regards.

U S Sharma

U S Sharma (Expert)
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12 August 2011 any amount received from relative will not be liable for incometax,

However as you mentioned that both does not file incometax return, so both have to keep good computation of their income and expenditure for any further reference if asked by department.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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12 August 2011 Gift from father in law is tax free in the hands of his daughter in law as per clause (vi) of explanation to section 56(2) (vi) of the IT Act,1961. Donee need not file return since gift is exempted.
Donor's return filing depends on amount of teaching income.

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