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treatment of gift received from friend and relatives ????

anoop (MBA (Finance), CA-PCC) (93 Points)

06 October 2009

hello guys.....

can u tell me how gift is treated when it is received from relatives and friends.........

what is the exemption limit in each case..........and some other things........

thnks.........

wating 4 ur reply........

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17 Replies

Manish (final student) (32 Points)
Replied 07 October 2009

hey anoop

as per section 56(2),in following cases gift is not treated as income:

1.Received from relatives.

2.Received on the occasion of marriage of the individual.

3.Received under will, inheritence.

4.Received from non relatives on other occasion exempt upto aggregate of Rs.50000/-

okie..

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anoop (MBA (Finance), CA-PCC) (93 Points)
Replied 07 October 2009

thanks buddy..........

Max Payne (employed) (2574 Points)
Replied 07 October 2009

Also add gifts received in anticipation of donor's death to Manish's list..

Sunil Liladhar Kotak (Manager (F & A)) (2025 Points)
Replied 08 October 2009

Pls find the relevant provision of the law from section 56 of the income tax act

on or after the 1st day of April, 2006 ^1a[but before the 1st day of October, 2009],(Applicable to gifts in cash, Cheque etc.

(vi) where any sum of money, the aggregate value of which exceeds fifty thousand rupees, is received without consideration, by an individual or a Hindu undivided family, in any previous year from any person or persons on or after the 1st day of April, 2006 ^1a[but before the 1st day of October, 2009], the whole of the aggregate value of such sum:

Provided that this clause shall not apply to any sum of money received

(a) from any relative; or

(b) on the occasion of the marriage of the individual; or

(d) in contemplation of death of the payer; or

(e) from any local authority as defined in the Explanation to clause (20) of section 10; or

(f) from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or

(g) from any trust or institution registered under section 12AA.

Explanation.For the purposes of this clause, relative means

(i) spouse of the individual;

(ii) brother or sister of the individual;

(iii) brother or sister of the spouse of the individual;

(iv) brother or sister of either of the parents of the individual;

(v) any lineal ascendant or descendant of the individual;

(vi) any lineal ascendant or descendant of the spouse of the individual;

(vii) spouse of the person referred to in clauses (ii) to (vi);]

Conclution : for Relatives no limit i.e. any amount of gift is not taxable & for any person other then relative a consolidated limit of 50000/- will be applied.

This limit of 50,000 is not for single person & is applicable to gifts received from all persons(other then relatives in toto).

on or after the 1st day of October, 2009,(for all types of gifts)

vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,

(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum;

(b) any immovable property,

(i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;

(ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consi-deration;

(i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property;

(ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration :

Sunil

harry (Awaiting ca final results) (461 Points)
Replied 08 October 2009

Whether gifts in kind will also be taxable w.e.f.1-10-2009?

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Sunil Liladhar Kotak (Manager (F & A)) (2025 Points)
Replied 08 October 2009

Originally posted by :harry
"	Whether gifts in kind will also be taxable w.e.f.1-10-2009?	"

yes, if the value of the same excceds the amount of 50,000/- from a person who do not fit into the definition of Relative.

sunil

anoop (MBA (Finance), CA-PCC) (93 Points)
Replied 08 October 2009

whether gift above rs 50000 from relative will also be taxable after1/10/2009 ???????

harry (Awaiting ca final results) (461 Points)
Replied 08 October 2009

So the inference is

All gifts whether in cash or kind is taxable if it exceeds Rs.50,000 received from anyperson including relative

CA Simarpreet Singh Gulati (Chartered Accountant) (530 Points)
Replied 20 January 2010

Whether the term "brother or sister of the individual" referred to in the definition of relative for the purpose of section 56(2) includes cousin of an individual or only real brothers & sisters are covered here???

C.Balaji (Learner) (1867 Points)
Replied 21 January 2010

Mr. Simarpreet Singh

I think cousins are not covered...

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Sourav Modi (Learner!) (306 Points)
Replied 03 February 2010

@ anoop......I dont think that gift received from a relative will be taxable even after 1.10.09

My question:

WEF 1.10.09, as it is mentioned, that gifts received above Rs. 50000, whether in cash or kind will be taxable. Will both be considered separately or together. That is, if 30000 received in cash and 30000 received in kind, what will be the treatment.

C.Balaji (Learner) (1867 Points)
Replied 03 February 2010

Mr.Sourav...

Gift exceeding Rs.50000/- is taxable includes both cash and kind....

as per your eg. it is taxable....

CA Simarpreet Singh Gulati (Chartered Accountant) (530 Points)
Replied 03 February 2010

W.e.f. 01.10.2009, the exemption of gift in cash upto an amount of Rs.50,000/- & further exemptions of gift of movable property & gift of immovable property each of Rs.50,000/- are available. Thus we have three exemption limits of Rs.50,000/- each i.e. total Rs.1,50,000/- per year.

Thus if Rs.30,000/- is received in cash & a gift in kind of Rs.30,000/- is received in kind, the whole amount is exempt...