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Gift to major son

Nilotpal (Profession) (56 Points)

11 April 2013

A father gives a Gift of Rs. 2,50,000/- to his major son.

Will it be taxable in the hands of the major son ?

Whether it will attract any Gift Tax either to father or to the major son ?

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7 Replies

(Guest)

Gifts from relatives whether movable or immovable is totally exempt from tax under section 56(2)(vii).

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Ankush sharma (Auditor Article Assistant) (816 Points)
Replied 12 April 2013

READ THE CHAPTER OF INCOME FROM OTHER SOURCES SEC 56

komal sharma (student) (72 Points)
Replied 12 April 2013

ift recieved by any person over n abovr Rs.50000 is taxable in the hand of reciever.provided such gift is not recieved on the ocassion of marrige,by will or inheritence..so in present case gift will b taxable

sourav jain (INTERNAL AUDITOR) (128 Points)
Replied 12 April 2013

Hello komal, how can Income tax department charge tax on gift recieved by son from his father, its not atall taxable if gift is recieved from any of the relative, even though the gift is income generating assets than also no clubbing provison will attract if its transfered to son.

Kirti Arora (Company secretary CA final Student) (75 Points)
Replied 12 April 2013

Dear Nilotpal

First and foremost your question whether gift tax will be applied either on father or son, so i would like to inform you that gift tax is demolished w.e.f. 01st october 1998. Then in 2004 Income tax department introduce a new section with sec 56(2) clause vii (https://business.mapsofindia.com/india-tax/gift-tax-india.html) "please read the link" which at present describer as unders:

-Gift received in cash by an individual or huf from relative is not taxable for any amount. Relative is important defination has been given in section 56. The m,andatory condition is here that person who is donor and who is donee both are relative. so No income tax or gift tax would be attracted in that case.

I am hereunder attaching exact wording of section 56. Please read the same

https://www.apcca.com/Attach/new_ready/Gifts%20under%20Income%20Tax%20Act.pdf

Hope the same will suffice you. Please let me know if am somewhere wrong. It will be honour for me.

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CA Achyut Shendye (CA) (38 Points)
Replied 12 April 2013

Hi,

As rightly mentioned by other experts, in present case gift given by Father to Son will not be taxable in hands of Son as their relationship falls under category of "Relatives" specified in proviso to Sec. 56(2)(vii) of Income Tax Act.

Further Gift Tax is abolished w.e.f. 01-10-98

Therefore to conclude, Gift in present case won't attract any income tax or gift tax.

Thanks,
CA Achyut Shendye

Varshit Shah (Self Employed) (676 Points)
Replied 12 April 2013

Maximum experts have said correct things. Gifts from Father to Son is not taxable. But to make this full proof what i suggest is get registered this gift deed on Rs.100 stamp paper.