Prity (Partner) (70 Points)
03 June 2010Hi,
What is the limit of giving gift in the form of cash or kind to persons falling under realtives as per the Income Tax Act.
How is the Gift taxable and in whose hands? And if it is given at the time of marriage then what are is the taxability.
Kindly reply.... Thanks
Amir
(Learner)
(4016 Points)
Replied 03 June 2010
Dear Prity,
1) There is no limit for giving gifts to relatives.
2) Gifts received from persons other than relatives are taxable in the hands of receipent if aggregate of such gifts in a year exceeds Rs. 50,000...
3) There is no limit on gifts made on the occasion of marriage.
In short,
Gifts to relatives - Exempt whether on their wedding or not.
Gifts on wedding - Exempt whether to a relative or not.
CA Deepak Joshi
(TaxTalk)
(178 Points)
Replied 03 June 2010
Dear Prity,
what Amir has said is absolutely correct...
Further this article might help you.....
/articles/gift-u-s-56-2--5544.asp
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 03 June 2010
Very nicely explained
Also u can visit this link https://www.itatonline.org/articles_new/index.php/law-on-taxability-of-gifts-a-comprehensive-analysis/
PRATEEK
(ACA)
(102 Points)
Replied 03 June 2010
the taxability limit provided u/s 56(2)(VI) states that if any gift is given to a non relative and the aggregate amount of cash recieved exceeds Rs 50000 for the whole year then the aggregate amount of gift recieved would be taxable in the hands of recipient.
if the gift is provided in kind before 1st of october 2009,then the amount of gift recieved would not be taxable but as per section 56(2)VII) if any gift(kind) is recieved from a non relative(on or after 01/10/2009) and the fair value/stamp value of that property exceeds Rs 50000 the whole amount would be taxable
for example
a lot of securities was transfered by Mr A to MR B (NON RELATIVE ) without any consideration and the fair value of the securities on the date of transfer was RS 85000 THE taxability in the hands of Mr B would be Rs 85000 as per section 56(2)(VII). any gift recived oin the occasion of marriage would be exempt . ANY GIFT RECIEVED FROM A RELATIVE IS EXEMPT
priyanka bathwal
(student)
(160 Points)
Replied 04 June 2010
section 56(2)(viii) Taxability of gift
Gift from relatives is fully exempt
Relatives-
1 Spouse of the individual
2 Brother and sis of the individual
3 brother and sister of spouse of the individual
4 lineal ascendent or descendent of the individual
5 lineal ascendent or descendent of spouse od the individual
6 bro and sis of parents of individual
7 spouse of persons in clause (ii) to (vi)
Gift is taxable in the hands of the person receiving the gift if the aggregate of such amt received during the year is more than Rs 50000. Then whole amt is taxable.
Now following assets if received without consideration or with consideration less than the stamp value or fmv is also taxable if the difference amt is more than 50000
land and building
jewellery
work of art
draWING
PAINTING
SCULPTURES
archeological collection
All gifts received on occasion of marriage are exempt
Nalini Munot
(CA)
(51 Points)
Replied 04 June 2010
fully exempt from tax. Whether you are received the gifts as Cash, Cheque or any goods. You are not liable to pay the tax for these gifts.
Here the “relatives” term defines by the Income Tax act as follows :
Here non-relatives means anyone who doesn’t come under the above mentioned relation for you. In this case you are tax exempt up to maximum of Rs.50000 for a financial year.
There is no monetary limit attached to this exemption.
The following list of gifts are fully exempted from Tax whether the it is received as Cash, or any other form of the material doesn’t affect the exemption.
Rahul Mittal
(Student)
(33 Points)
Replied 04 June 2010
Dear Prity
- no limit for giving gifts to relatives.
- Gifts in kind are taxable in hands of receipent only if he is individual or HUF................
- If received from other than relatives then taxable only if it exceeds 50000......
- no limit on gifts made on the occasion of marriage.
manisha ahuja
(article clerk)
(147 Points)
Replied 04 June 2010
There is no limit for giving gifts to relatives.
CAclubindia
