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Is Gift Income or Assets

26 May 2022

Dear Sir

I got received Gift in cheque form from my uncle
so is this my income or Assets

what consider in my personal books of this gift

income or Assets?

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4 Replies

Kev Men (788 Points)
Replied 26 May 2022

It will be considered as income as per Sec 56(2)(x). However, as it is received from a 'relative', it will not be taxed. i e it will be exempt.

Brother of either of the parents of the individual is considered a 'relative' for the above section. So 'uncle' comes in the definition of a relative.

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CA Raj Doshi (Practising CA) (8924 Points)
Replied 27 May 2022

Yes. it is income in the nature of capital receipt.

Nidhi (Chief Accountant) (3150 Points)
Replied 27 May 2022

It's your income,
but if we received any income, than there is effect on our assets also....
like If we received cash gift, than increase in cash/bank balance.

prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 28 May 2022

If you are proprietor it is neither income not asset , add same gift in Capital account, pass entry .

Bank. A/c Dr
To Capital A/ c Cr
( Being gift cheque received from Uncle )

Not Taxable in the Hands of recipient as per section 56(2) of the Income tax act as stated above .