How to ensure gift is treated as gift and not income

Tax queries 2472 views 12 replies

Hi,

My wife recently received gift of Rs. 15000 (in cash) from her father.

To treat this amount as gift, do we need to have something in writing? I mean, does her father give her in writing that he is giving gift to her daughter?

I want to ensure that this amount is not treated as income but as a gift, so wanted to know if we need something in writing for this.

thanks!
 

Replies (12)

Dear Dr. Jones,

Gifts received from Father is not taxable..I mean the Income Tax allows it not to be treated as Taxable Income..

As such it is not mandatory to have anything a documentary evidence of Gifts.

But u can go for a "Gift deed" on a stamp paper. This is the best evidence u can have. 

Dr.Jones

agree with Mr.Amir

Gifts received from Father is not taxable...

As rightly said by Mr.Amir it is not mandatory to have documentary evidence of Gifts.

Gift deed is a good evidence....


 

The Explanation to Section 56(2)(vi) provides that the expression "relative" means:
 

  1. Spouse of the individual;
  2. Brother or sister of the individual;
  3. Brother or sister of the spouse of the individual;
  4. Brother or sister of either of the parents of the individual;
  5. Any lineal ascendant or descendant of the individual;
  6. Any lineal ascendant or descendant of the spouse of the individual; and
  7. Spouse of the person referred to in clauses (2) to (6).

Thank You for your comments.

I understand that gift from father is not taxable. But as it is given in cash, there is no evidence of the source of money.

So gift deed seems to be right option..correct? Also, correct me if I am wrong: Gift deed should be on stamp paper only right? Is there any format for such deed which can be used?

Thanks!

Dear Dr. Jones,

Ya u r rite.......

When u will go to buy a "Stamp Paper", just ask them to type a "Gift deed" on it.......They generally do have the standard format with them.......

agree with Mr.Amir..

 Any individual of huf can received exempted  gift from his relative withyout any limit. Now there is no need to print gift deed on stamp paper. You can print gift deed on a simple paper. i am attaching  the format. 

Thanks 2 all

Dear Ajay,

U r rite that Gift deed on stamp paper is not mandatory, but then I mentioned it as the "BEST EVIDENCE" & not as the only evidence...........

Thanks for clarifying , I think it was not coming out of my post.

Dear Amir

I Wanted To tell to only that if  stamp paper is not used, still the deed will be valid.  Are yaar Stamp Paper ka paisa bach jayega na

Dear Ajay,

Ya u r rite brother, I said it on my earlier post also that I agree with u.

instead of all this process i.e stamp paper, you can say to your inlaws that pls. make the payment through banking channel.

it is a solid evidence that your wife get this money from her father.

make sure show this income in return of your wife and claim exemption of it, so that capital build.

 

correct me if i am wrong........


CCI Pro

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