Gift from Father in law

Shariq (Querist) 17 April 2009 This query is : Resolved
Respected Sir,

Can I take Rs 10.00 lacs from my Father in law. If yes is there any tax liability will imposed on me or my father in law.

Pls advise.

Thanks

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tarun goyal (Expert) 17 April 2009
yes, you can take that amount as gift. But that should be supported by a valid offer and acceptance document. further, the tax liabiltiy shall be regulated under the provisions of income tax Act by following the clubbing of income provisions.

A V Vishal (Expert) 17 April 2009
Gift tax in India was regulated by the Gift-tax Act which came into effect on 1st April, 1958 and is applicable in the entire country except in Jammu and Kashmir. As per the Gift-tax Act of 1958, a gift in excess of Rs. 25,000 (cash, demand draft, check, online money transfer) received from anyone who is not your blood relative, is taxable. Even if your best friend has just won a huge lottery and gifts you Rs. 30,000 in cash/draft/check, you'll have to declare pay a Gift-tax on it.

Exemptions

Gift-tax need not be paid if:

The gift was given by a blood relative, irrespective of the gift value.

The value of the gift is less than Rs. 25,000.

The gift money was in return of something. So if you receive Rs. 100,000 from someone and in turn you give her a designer dress, you need not pay Gift-tax on the money received. This transaction will be considered a purchase and is therefor exempt from Gift-tax.

The gift was received on your wedding, irrespective of the gift value. But a gifts in excess of Rs. 25,000, received for any other occasion (birthday, anniversary, etc.) is taxable.

Procedures

There is no standard procedure to be followed for receiving a taxable gift. When you file your returns, you should add the gift amount to your annual income under 'Income from other sources'. You'll then be taxed depending on your total taxable income. However, make sure that you:

Accept the gift in writing via a gift deed. The deed will mention the value of the gift and the names of the persons giving and receiving the gifts.

Sign the gift deed and get it signed by the person giving you the gift.

Register the gift deed by paying the requisite stamp duty.

Subject to the provisions of this Act, gift-tax shall be payable by the donor but when in the opinion of the Assessing Officer the tax cannot be recovered from the donor, it may be recovered from the donee:

Provided that where the donees are more than one, they shall be jointly and severally liable for the amount of tax determined to be payable by the donor:

Provided further that the amount of tax which may be recovered from each donee shall not exceed the value of the gift made to him as on the date of the gift.

sanjeev murthy desai (Expert) 18 April 2009
Thank you vishal, very nice answer

Tribhuwan Pandey (Expert) 18 April 2009
Mr. A V Vishal has given detailed reply.

RAJENDER SINGH MANN (Expert) 19 April 2009

Dear colleague
An individual can take gift (Monetary) from father in law. There is no limit for that. U/s 56 of the Income-tax Act, 1961, if gift monetary is taken from relative is exempt from income tax. so dear friend you can take gift from father in law which is exempt from tax.