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Daughter receives 10 lakhs from father

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)

16 February 2013

If a daughter receives Rs 10,00,000 from her father without consideration , then this 10 lakhs does not constitute income in the hands of daughter under section 56.

But if she receives with consideration, then does it become taxable ? How to prove in assessment with consideration / without consideration.

Please guide.

Regards,

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3 Replies

CA Ankit Totla (Practicing Chartered Accountant) (469 Points)
Replied 16 February 2013

what consideration are you refering to?

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Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 16 February 2013

Ankit

I am not referring to any consideration. As the Act states under section 56 'without consideration' I am trying to understand the taxation impact if there is a consideration.

Thanks,

CA Ankit Totla (Practicing Chartered Accountant) (469 Points)
Replied 16 February 2013

ok.

here, consideration means providing any thing/article/service against the amount received.

if there if only one transaction which is as simple as a credit in the daughters bank account and the same is simply added to the capital of the daughter and the father is not claiming any deduction or such other things but merely reducing the same from his capital is sufficient to prove that the money given is purely out of love and affection and it needs no further proof.

however, if the amounts are huge (Rs. 10L is not considered as huge) it is advisable to prepare a gift deed even though it is between father and daughter.

alternatively you can provide it as an interest free loan in the books of account and keep it standing the same way till perpetuity to avoid the gift deeds.