07 February 2016
Hi,
I gave some money to my relative (my wife's sister's husband), few lakhs twice or thrice this year. I am a salaried person and so is he.
So what is the tax implication?
Suppose, there's an IT scrutiny and I tell them :
1. This was just a gift to him.
OR
2. This was an unsecured loan to him without interest.
What would be the tax implication for both the situation?
07 February 2016
Assuming you transferred the amount through bank account. In case of gift, it is not taxable in the hands of donee, as donee is your relative as per section 56(2)(vii).
The same may also shown as unsecured loan, which is not taxable.
However, evidence to show as above is very important otherwise the same will be treated 'other income' especially in case of a cash deposit into a bank account, where evidence not available to show the source of such deposit.
CAclubindia
