Ashish (Professional) (117 Points)
12 April 2009Please tell me I can give any amount to my father as a gift. For eg. I like to give Rs. 14 Lakh to my father as a gift to buy a property on own name, so i can gift this amount and this is tax free in the hands of my father?
Secondly, my father is a senior citizen and annual income is less then the taxable slab, so he needs to file return because he get's the big amount as gift.
Please answer my questions in detail, thanks.
CA. Megha Topiwala
(Job)
(1534 Points)
Replied 12 April 2009
hello....
gift received from relatives is exempt from tax.....
hence again ur father is not required 2 file retun of income even if he receives a gift of such a huge amt....
Ashish
(Professional)
(117 Points)
Replied 12 April 2009
Thanks Megha for answer. So, there is no limit on the amount of gift given to relative?
But i think I must give some letter to my father for showing this is a gift and he can represent anytime if required. If yes, then anyone can post the letter format/wordings for such type of gifts.
CA. Megha Topiwala
(Job)
(1534 Points)
Replied 12 April 2009
yeh.. ofcourse it is always advisiable to prepare a gift deed n make d payt through an account payee cheque.... i m presently not having any format of gift deed....
Ashish
(Professional)
(117 Points)
Replied 12 April 2009
I think writing on a plain paper will also work and no need of making a registered deed.
CA. Megha Topiwala
(Job)
(1534 Points)
Replied 12 April 2009
it is advisiable to executed on stamp paper rather than plain paper.....
Milan Somani
(CA)
(1456 Points)
Replied 12 April 2009
To be on more safer side such declaration or affidavit may be made on Stamp paper (Rs.10).
Ashish
(Professional)
(117 Points)
Replied 12 April 2009
Ok, but if any one have format / wordings of such declaration, then please give it to me.
M.M.SURANA
(Director -Taxation )
(532 Points)
Replied 12 April 2009
Mr. Aashish
The Provisions of Sec. 56(2)(vii) of IT Act, 1961 deals with the gifts, any amount more than 50,000/- will be taxed in the hand of receipient .But in some of cases provision will not be applicable. In your case Gift to Any lineal ascendant or descendant of the individaul is applicable. Hence it is not taxable. But U hav to be practical . In normal course Father only give gift to son but in yr case it is revrse. It is not taxable, but U hav to careful. U must follow certain norms, Otherwise Assessing Office may raise certain question Mark. I will be send draft of Gift Deed. It is not necessary that declaration should be registered. For safer side Gifted amount should be from Own source of fund . It should not be generated by other means say by bok entry, by loan from other and transfer of fund to father etc.
Surana, Chennai
9952967237
Ashish
(Professional)
(117 Points)
Replied 12 April 2009
Well, i am giving a PPF amount which i am receiving from maturity of account. So, i think my source of fund is genuine. Please send me the gift deed draft, sending you PM for email address.
Party
(Student)
(134 Points)
Replied 12 April 2009
I think the income from the property wil be taxable in you hands..be carefull..
Ashish
(Professional)
(117 Points)
Replied 12 April 2009
father is just buying a house, so what's the question of income from the property arises? Secondly, as per law 1 house per name is tax free, so no rental income.
parthasarathy
(Practising, C.A)
(188 Points)
Replied 12 April 2009
hi, there is no specific format for cash gifts made. give a general deed addressing " whom so ever it may concern" and specify the mode of payment and also the source. dont forget to write that the gift is out of natural love and affection. Rs.10/- non judicial stamp paper is enough for the deed.
As per the I.T Act. you can received and make any amount of gift within your relatives (as defined by the Act) all you need is the donor must be able to prove his source of the gifted amount.
have a grt day.
Ashish
(Professional)
(117 Points)
Replied 12 April 2009
Can you confirm, in the deed I have to mentioned the cheque number and from source i received that money?
M.M.SURANA
(Director -Taxation )
(532 Points)
Replied 13 April 2009
U need not to mentione source of fund in gift deen. I ahv mailed draftin to your mail Id. Pl make it ready on stamp paper, And stamp Duty is payable as state rule may be 10/- or 20/- or 50/-. It is a declarion not affidavit.
Surana, Chennai
9952967237
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