Sharad (Software Engineer) (47 Points)
08 July 2012Hi,
I want to know, If I gift my parents any gift in form of Cash/Cheque, then how it will be treated in Income Tax rules?
- Will it be taxable in my hand?
- Will it be taxable in my parents hand?
- What is the limit of such gifts?
- How to show these gifts in my ITR as well as my parents ITR?
- What all supporting documents will be required?
Please respond above queries in detail..
Thanks in advance..
-Sharad-
MAHESH GARG
(AUDIT EXECUTIVE)
(334 Points)
Replied 08 July 2012
Gift to relative is not taxable as per Income Tax Act.
realtive as per income tax includes parents.
No need to worry on this transaction and Gift can be made of watever amount
CA Harshit Rastogi
(Chartered Accountant)
(722 Points)
Replied 08 July 2012
Any income generared by ur parants by using this amount will be taxable in ur hand....
Sharad
(Software Engineer)
(47 Points)
Replied 08 July 2012
Thanks for quick replies..
Lets say.. if I gift rs. 50K to my mother by cheque. And she is house-wife and she uses this amount for day-to-day expenses.
Now will this 50k be taxable in my hands? if not, then where to mention this gift in my ITR?
Thanks,
Sharad
MAHESH GARG
(AUDIT EXECUTIVE)
(334 Points)
Replied 08 July 2012
Respected CA Harshit Rastogi Ji
Can you please tell under what section of Income Tax such provision is mentioned??
Is there any new law in Force or may be i don't know.
please help me out.
MAHESH GARG
(AUDIT EXECUTIVE)
(334 Points)
Replied 08 July 2012
Dear Sharad
it is not required to be mentioned anywhere in ITR
CA Pratik Sirwani
(Chartered Accountant)
(127 Points)
Replied 08 July 2012
Any sum of money received, without any consideration, exceeding Rs.50,000 shall be taxable in the hands of recepient. However, if recieved from a relative, shall not be taxable. So, in your case, there shall be no tax liability on your parents. But, it will be better if you make a Gift Deed and keep it which may be helpful in future.
Sharad
(Software Engineer)
(47 Points)
Replied 08 July 2012
It means, I can not get any tax benefit by gifting to my parents.. is it?
CA Pratik Sirwani
(Chartered Accountant)
(127 Points)
Replied 08 July 2012
If you are giving any sum of money as a gift then you are not liable to tax but the person receiving the money is liable. So if u gift Rs. 50k to your mother and she is using it for household purposes, then there shall be no tax liability.
Ritika Pundir
(CA)
(154 Points)
Replied 09 July 2012
The gift will not be taxable. Yet, I doubt whether clubbing provisions would get attracted in this case & income generared by the parents by utilization of this amount would taxable in the hands of the assessee.
Reference to the section or any case law would be highly appreciated as I have myself been unable to find the same.
Ritesh Jain
(CA, CS in Job)
(675 Points)
Replied 09 July 2012
The 50k which u r planning to gift to ur parents had already suffered tax in ur hands as you will show as your income from whatever source you have.. and the same will not be taxed in the hands of your mother(because she is your relative) so the last taxed person for that amount will be you only if your mother use that amount for her daily expenses...
Ritika Pundir
(CA)
(154 Points)
Replied 09 July 2012
@ CA Ritesh Jain
"only if your mother use that amount for her daily expenses.."
Sir, If the assesse's mother invests the amount received as gift in an FDR, would the interest received on the FDR be clubbed in the income of the assesse?
Kindly clarify.
devagnaya
(Manager)
(34 Points)
Replied 09 July 2012
Gift is not taxable u/s 56(2)(vi) if it is received from relatives. Relatives include son,mother,spouse,father,etc.
Here in the given case you can give any amount of gift to your mother and she can show it in her ITR as gift received from Son. It will be exempt for her.
She can use the same for any purpose. There is no restriction on the same.
For Futher queries mail me at devagnaya @ gmail.com
CA Gaurav Choradia
(Relationship Manager )
(418 Points)
Replied 09 July 2012
Dear Sharad,
you can gift any amount in any form (cash,cheque or kind) to your parents. There is no tax liability in your hand nor in yours Parents hand.
Income on gifted amount shall not be clubbed in your hand because as per IT Act only minor child's or spouse's or son's wife's income can be clubbed.
if ur mother expend that money in house hold expenses it doesn't affect the taxablity provisions of gift.
So you can give Gift any amount to your parents with out any worry.
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