pooja (student cpt) (93 Points)
25 November 2012hello friends... i recently read in a tribune newspaper dat in a gift transaction, both donor n donee r exempt from tax .... i m not sure in wat context hv they talked about the donor,.... money dat is given by donor to his relative is clubbed in doner's own income ..... so how can be donor exempt from tax ?????????...... did tribune mean to say dat the cash gifted by donor is a from post tax income ?????.....
pls clarify soooooon
Mayur
(Partner @ Mayur Thakkar & Co.)
(3111 Points)
Replied 25 November 2012
i just didnt get ur question can u please elaborate...
pooja
(student cpt)
(93 Points)
Replied 25 November 2012
question in tribune--What is the maximum amount of cash one can gift to his/her close relatives (say father, mother, son, and daughter) during the financial year, and is any gift tax applicable? How many times can one give such a gift during one's lifetime and is it necessary to prepare a gift deed?
— Swarup
answer in tribune--There is no limit on the amount of cash gifts (through normal banking channels) that one can give to one's close relatives. Of course, the gift must be legal and if required the donor has to prove the source of funds. In cases of gifts to close relatives, the entire amount is taxfree, both for the donor as well as for the recipient. Also, there is no limit as such on the number of times such gifts can be given. While preparing a gift deed is not necessary, having an affidavit that puts down the gift transaction in writing will be helpful.
Varshit Shah
(Self Employed)
(676 Points)
Replied 25 November 2012
Whatever u have read is correct. None them is subject to tax.
Donor is not subject to Clubbing. As there is no such provision.
Donee is specifically got exemption u/s 56 if he recd such gift from relative.
CA Ruben Balooni
(Professionalism ™)
(1324 Points)
Replied 25 November 2012
Clubbing is done when the donor gifts ASSET for inadequate consideration. Here ASSET means CAPITAL ASSET and cash is not considered as CAPITAL ASSET. However if the donee purchases some ASSET from GIFTED MONEY then income from such ASSET shall be clubbed with the income of donor.
When CASH is gifted to RELATIVE then is not taxable in the hands of donee otherwise (where Donee is not RELATIVE) it is TAXABLE if aggregate of CASH GIFTS exceeds 50,000 in the Previous Year.
- Ruben Balooni
Mayur
(Partner @ Mayur Thakkar & Co.)
(3111 Points)
Replied 25 November 2012
The answer given by treibune is in respect of gift tax nd it meaned that cash given by a person to his/her relative is not chargeble to gift tax.
Anil Sankar V
(CA)
(1877 Points)
Replied 26 November 2012
there is no concept of gift.the following is under:incomer from other sources.
CA Ruben Balooni
(Professionalism ™)
(1324 Points)
Replied 26 November 2012
| Originally posted by : forhistory | ||
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there is no concept of gift.the following is under:incomer from other sources. |
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Kindly refer section 56(2)(vii) & 56(2)(viia) on Income Tax Act.1961 for correct knowledge.
ANUBHAV VISHNOI
(-)
(150 Points)
Replied 27 November 2012
Hi Pooja,
Answer given by Tribune is only in respect of cash gift to relatives. So if donor and donee are covered under relevant definition of relatives which is u/s 56 then definitely the gift is not taxable in the hands of donee.
But if a person gives cash gift to his/her spouse without consideration and if that spouse invests the gifted amount and earns some income then that income will be clubbed in the hands of donor. This is as per section 64.
I hope this will help you
Thanx
CA Anubhav Vishnoi
8750089567
CAclubindia
