Gift amount
Querist :
Anonymous
(Querist) 19 January 2012
This query is : Resolved
Respected Sir,
Somebody has gifted the xyz amount to his relative and that same person invested that amount in Monthly Investment Scheme of Post Dept.
After the maturity of MIS whatever the amount receved gifted amount and interest the same amount again invested in MIS of post Dept.
My query is which amount will be taxable?
or not
Kindly advice for the same.
Sailesh Kumar Shah
(Expert) 19 January 2012
Gifted amount is not liable to income tax subject to transaction between Specified relatives.
Interest income will be taxable on the hand of investor.
ajay sethi
(Expert) 19 January 2012
interest income will be taxed only
Sankaranarayanan
(Expert) 19 January 2012
if the gift amount exceed the tax exception limit then it is taxable under income tax act.If the Sum of money:-As per the provisions of the I-T Act, 1961 (the Act), any sum of money received by an individual or a Hindu undivided family in a particular financial year, without consideration, the aggregate value of which exceeds Rs 50,000 is taxable.
Immovable Property:Effective October 1, 2009, the scope of the taxability provisions in respect of the gifts has been enlarged to include immovable property, including land or building or both. If any immovable property is received without consideration, whose stamp duty value exceeds Rs 50,000, the stamp duty value of such property would be taxable.
If any immovable property is received for a consideration which is less than the stamp duty value of the property by an amount exceeding Rs 50,000, the stamp duty value of such property would be taxable.
Other gifts:- Similar to the immovable property, certain other gifts received w.e.f October 1, 2009, has also been brought under the tax net. These include shares and securities, jewellery, archeological collections, drawings, paintings and sculptures as specified under the Act. In these cases, if the aggregate fair market value of the benefit received by way of a gift exceeds Rs 50,000, the same would be taxable.
Exceptions to the rule :- It is pertinent to note that the tax law does provide for certain exceptions which are worth noting as these provide substantial relief to individuals/HUF under normal day-to-day circumstances. These include:
Gifts from relatives :-Gifts received from any relative, as defined under the Act, is not taxable. Relatives include spouse of the individual; brother or sister of the individual; brother or sister of the spouse of the individual; brother or sister of either of the parents of the individual; any lineal ascendant or descendant of the individual; any lineal ascendant or descendant of the spouse of the individual; and the spouse of the person referred to as aforesaid.
Gifts received on marriage:-Any gift received by an individual on the occasion of his/her marriage would also not be taxable. It is customary to receive gifts of money and kind on the occasion of marriage. Therefore, this is an important exception to the general rule.
Gift received under a will, etc :-Any gift received under a will or by way of inheritance, or in contemplation of death of the payer is also not taxable.
Certain other events :-In case an individual receives any gift from any local authority as specified under the Act, the same would not be taxable. Similarly, any gift received from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust/institution, as specified under the Act, would not be taxable.
Documentary Evidence:-Gifts received are quite prone to litigation. Hence, it is prudent to maintain documentary evidence in respect of the gifts received, to avoid any dispute with tax authorities at a later stage. This is particularly relevant in case the gift amount is substantial and also where it is received from relatives. In case of gift of money received from a relative, it is advisable to have gift deed/letter of understanding exchanged and kept in records by the recipient of the gift for future reference.
Tags: Documentary Evidence to gift, Gift, gift of Immovable Property, Gift received under a will, Gifts from relatives, Gifts received on marriage
prabhakar singh
(Expert) 19 January 2012
Interest earned under MIS plan of post office is always taxable as income from other sources.
You have not stated the relation between donor and donee so that one can speak any thing with certainty.
Raj Kumar Makkad
(Expert) 19 January 2012
there is no reason to differ with the views already expressed.
M/s. Y-not legal services
(Expert) 20 January 2012
Gifts under section 56(2)(vi) of the Income Tax Act, 1961
(For gifts received between 01.04.2006 to 30.09.2009)
Where any sum of money, the aggregate value of which exceeds Rs.50,000, is received
without consideration by individual/HUF, the whole of aggregate value is taxable as
income from other sources.
Provided that this clause shall not apply to any sum of money received;
(a) from any relative; or
(b) on the occasion of marriage of the individual; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer.
For the purpose of this, ‘relative’ means : ‐
(a) spouse of the Individual;
(b) brother or sister of the individual;
(c) brother or sister of the spouse of the individual;
(d) brother or sister of the either of the parents of the individual;
(e) any lineal ascendant or descendant of the individual;
(f) any lineal ascendant or descendant of the spouse of the individual;
(g) spouse of the person referred to in clause (ii) to (vi).
Gifts under section 56(2)(vii) of the Income Tax Act, 1961
(For gifts received on or after 01.10.2009)
From 1.10.2009, new clause [Sec. 56(2)(vii)] introduced for charging of Gifts received
by individual/HUF. Earlier, only gifts received in the sum of money was chargeable
under Income Tax Act. However w.e.f. 01.10.2009 gift received in kind is also
chargeable subject to certain conditions.
The new provisions is described as under :
I. If any sum of money received without consideration, the aggregate of which
exceeds Rs.50,000, the whole of such sum will be chargeable.
II. If any immovable property received –
(a) without consideration, the stamp duty value of which exceeds Rs.50,000,
the stamp duty value of such property will be chargeable.
(b) For a consideration, which is less than stamp duty value of property by an
amount exceeding Rs.50,000, the stamp duty value of such property as
exceeds such consideration will be chargeable.
III. if any property other than immovable property received –
(a) without consideration, the aggregate fair market value (FMV) of which
exceeds Rs.50,000, the whole of aggregate FMV of such property will be
chargeable.
(b) For a consideration, which is less than the aggregate FMV by an amount
exceeding Rs.50,000, the aggregate FMV as exceeds such consideration
will be chargeable.
However any such gifts received from relatives shall not be treated as income.
For the purpose of this, ‘relative’ means : ‐
(a) spouse of the Individual;
(b) brother or sister of the individual;
(c) brother or sister of the spouse of the individual;
(d) brother or sister of the either of the parents of the individual;
(e) any lineal ascendant or descendant of the individual;
(f) any lineal ascendant or descendant of the spouse of the individual;
(g) spouse of the person referred to in clause (ii) to (vi
-tom-
Vineet
(Expert) 21 January 2012
Mr Anonymous, your query is quite vague to be replied with certainty.
First of all, the relationship between donor and donee not specified. If they are relative as defined in section 56 of Act, then gift amount is not taxable in hands of recipient. Otherwise the taxability of amount more than 50,000 has already been answered by experts above.
Coming to taxability of interest from MIS scheme, no doubt is taxable as income from other source. But in whose hand??? again depends upon relationship between donor and donee.
If the donor is spouse( both husband and wife) or in-laws of a lady, the interest income shall be clubbed in the hands of donor. In the case of minor child being the gift recipient, irrespecive of the donor, the income shall be clubbed in hands of parent who earns more.
