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Applicability of gift tax

Neethu (CA) (138 Points)

13 May 2013

Whether any gift received from uncle ( Mother's Brother ) is taxable as Gift Tax?

What are the limit , Tax rates and important provisions?

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2 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 13 May 2013

Mother's Brother (Uncle) is a Relative under the Income Tax Act, 1961. Therefore gift received from Uncle is Exempt and no gift tax is applicable.

But a Gift deed is to be prepared containing the Donor's name, Donee's name and the source of income.

Regards,

Devendra Kulkarni

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Sonam Bidasaria (CA) (770 Points)
Replied 13 May 2013

Ms. Neethu, in current scenario, there is no such term of "GIFT TAX". Till 1998, gifts were taxed under the Gift Tax Act, 1958, but subsequently Income Tax Act was amended to widen the scope of taxaton of gifts and at the same time provided some relief to the assessee by giving some exclusion from the levy of income tax on gifts received by recepient.

I would also want to let u know, that not only the gifts received in cash (from uncle) will be exempted, but also any property (i.e. immovable property being land or building, shares and securities, jewellery, archeolgoical collection, paintings, drawings, sculptures, any work of art and bullion) will also be exempted pursuant to Sec 56(2)(vii)