Finance Manager
24 Points
Joined March 2007
Section 56 of the Income-Tax Act specifically exempts any sum of money or property received under a will or inheritance as not taxable in the hand of recipient. Therefore, any amounts legated by your grandfather are not taxable at all and you do not have to pay any income-tax on the same.
Further to above, 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. Therefore, it's crucial to know the meaning of the expression 'relative' for this purpose. The Explanation to Section 56(2)(vi) provides that the expression "relative" means:
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Spouse of the individual;
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Brother or sister of the individual;
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Brother or sister of the spouse of the individual;
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Brother or sister of either of the parents of the individual;
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Any lineal ascendant or descendant of the individual;
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Any lineal ascendant or descendant of the spouse of the individual; and
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Spouse of the person referred to in clauses (ii) to (vi).
However,the gold/cash might attract the Welth Tax based on the value.