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Gift deed is required or not ?

zeal sheth (CA) (127 Points)

23 February 2009

If father or mother give a/c pay cheque 4 times in a year to their daughter as a gift then GIFT DEED is require all the time or not ?

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6 Replies

Abhinav Agarwal (M.Com C.A SAP Consultant) (814 Points)
Replied 23 February 2009

See as per the common parlance, every gift should be supported by a Gift DEED. However, as per the general practice & implementation problem, any gift within the family and by A/c payee cheque may not be supported by any Deed. However, it should be kept in mind that if the amount gifted is quite significant(Huge)or the gift is in some other form (property, vehicle etc), it is necessary to keep a gift deed ready before filing ROI.

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CA CS VINAYAK PATIL (CHARTERED ACCOUNTANT) (921 Points)
Replied 25 February 2009

Originally posted by :zeal
"	If father or mother give a/c pay cheque 4 times in a year to their daughter as a gift then GIFT DEED is require all the time or not ?	"

I think only one deed sufficient for the whole year of Gift if he received from one person.

Suresh Savaliya (CS ) (62 Points)
Replied 14 March 2009

Dear

For movable property/cash/cheque, No any deed is required legally. However it is advisable to have a gift deed to justify in case of any query from IT that it is genuine gift and not loan.

In your case, you can have have single gift deed at the end of year declaring by donor that she has made gift to her beloved for Rs. _______ during the year vide following cheques.

Suresh Savaliya+
ACs, LL.m.
Mumbai
9987091267

Vijay (Profession) (25 Points)
Replied 14 March 2009

Gift made by parents to their children is tax free. As per law no gift deed is required for any gift made by parents or any one.However in order to avoid any future troubles from an Assessing Officer it is advisable to have a gift deed. In this case one consolidated gift deed would be sufficient.

Vijay Bhushan Agarwal,kolkata

09831738503

deepak K Gujrati (CA-practice) (966 Points)
Replied 15 March 2009

While in an assessment proceedings to justify a gift, two things are required:

1. Credit worthiness of the donor

2. Genuineness of the transaction

In support of the above following things are required:

a. Gift deed stating the details of the payment made i.e. cheque no date amount . There may be one deed for all gifts made.

b. Copy of the Bank a/c of the donor just to justify that donor had sufficient balance to pay the amount. If before giving the gift cash is deposited and cheque is issued, it may creat several questions like where the cash was lying, what is the source of cash etc

c. Income Tax computation of the donor

d. Income Tax Acknowledgement of the donor and copy of the Balance sheet if available.

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deepak K Gujrati (CA-practice) (966 Points)
Replied 15 March 2009

Originally posted by :deepak
"	While in an assessment proceedings to justify a gift, two things are required: 1. Credit worthiness of the donor 2. Genuineness of the transaction In support of the above following things are required: a. Gift deed stating the details of the payment made i.e. cheque no date amount . There may be one deed for all gifts made. b. Copy of the Bank a/c of the donor just to justify that donor had sufficient balance to pay the amount. If before giving the gift cash is deposited and cheque is issued, it may creat several questions like where the cash was lying, what is the source of cash etc c. Income Tax computation of the donor d. Income Tax Acknowledgement of the donor and copy of the Balance sheet if available.	"