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Gift's

B.TARUN KUMAR (ARTICLE TRAINEE) (40 Points)

05 January 2012

Hai friends,

i am Tarun , article trainee. I have a small doubt about gifts.

suppose I am an assesse, i made a gift to my mother of Rs.1,00,00/-, on occassion of my mother's birth day.. I trnsferred it to my bank account to my mother bank account through online. According to the provisions of income tax act under sec.56(2) if any gift value exceeds Rs.50,00/- it is fully taxable under the head income from other sources.

so my mother pays tax on it. Are you all absorved there is a situation of double taxation,. yes, because i (assesse) also pay tax on it . so please tell me the provision, in this case to avoid double taxation. is there any relief to me (assesse)?

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5 Replies

suchit shah (Dy. Manager(Finance & Accounts)) (208 Points)
Replied 05 January 2012

Dear,

How would u pay tax on that because only your mum will pay tax on that?????????

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CA Ketan Waghela (Partner at Elite Educare) (356 Points)
Replied 05 January 2012

Tarun ji, I would like to draw your attention to the sec 56(2)(vi):- The provisions of the aforesaid Section 56(2)(vi) applicable to the taxation of gifts in excess of Rs. 50,000 in a financial year in the aggregate are applicable for gifts received from non-relatives. Thus, any gift from relatives of any amount during the financial year is completely exempt from tax. The Explanation to Section 56(2)(vi) provides that the expression "relative" means: ¬ Spouse of the individual; Brother or sister of the individual; Brother or sister of the spouse of the individual; Brother or sister of either of the parents of the individual; Any lineal ascendant or descendant of the individual; Any lineal ascendant or descendant of the spouse of the individual; and Spouse of the person referred to in clauses (ii) to (vi). Thus, a gift received by an individual from his spouse, or from his brother or sister, or from the spouse's brother or sister, parents, or from any lineal ascendant or descendant of oneself or one's spouse would normally be fully tax-exempt. Similarly, any gifts of any amount whatsoever received from the spouses of any of these persons would also be completely exempt from income tax.

B.TARUN KUMAR (ARTICLE TRAINEE) (40 Points)
Replied 05 January 2012

Thanks for giving reply to my query. but i have a small doubt , there is no deduction for amount given to relatives by the donor while caluculating the income of himself ,as per my knowledge. if you have any query about this please quote the section under which an assesse get's deduction for the amount given by him as a gift.

B.TARUN KUMAR (ARTICLE TRAINEE) (40 Points)
Replied 05 January 2012

that's okay ketan, i am asking about the position of donor(assesse). whether it should be treat as deemed income of him(assesse -donor) or not,while caluculating his income. if you have any query for this please quote the section under which the assesse get's deduction for the amount given by him as a gift to relative.

Murli Manohar Agarwal (Self Employed) (36 Points)
Replied 05 January 2012

Mr. Tarun kumar How could u get deduction on gift made by you, its not an expense to earn that income from which you are making gift.. to claim any deduction for an expense, such amount must be applied towards earning that income..you r not earning from such gift..there is no double taxation in ur case as you are making gift from ur taxed income and ur mother do not have to pay any kind of tax on the amount of gift received.