Gift?
RAJESH CHOUDHARY
(Querist) 15 January 2012
This query is : Resolved
Hello Friends,
I have a query. The case is as follows:
My mother wants to gift me Rs. 500000\- in cash. She is housewife having PAN card but never filed ITR since income is always below exemption limit. She is not having bank account. Is it acceptable to get that much amount in cash? I know it will be tax free for me but is there any chance of her getting trapped in Legalties of Income Tax considering she never filed return and does not have Bank account.
If I can accept, then is it necessary to prepare a Gift deed? If yes, then what should be the amount of Stamp Paper.
I could have taken that as Interest free loan but sec 269T and 269SS prohibits loan in cash above Rs. 20000.
R.Ramachandran
(Expert) 15 January 2012
First and foremost she has to account for the source of that much cash! It will be very difficult for you also to justify.
RAJESH CHOUDHARY
(Querist) 15 January 2012
thanks for the reply ramachandran sir
But sir,
she has PAN Card and there is no need to file ITR as long as income is below exemption limit. So for these many years it is not difficult for any to accumulate that much cash.
Advocate. Arunagiri
(Expert) 15 January 2012
Why you want to create gift deed and all. simply accept it.
Raj Kumar Makkad
(Expert) 15 January 2012
There is no need for gift deed rather obtain an affidavit from your mother to the effect that out of her long savings since last various year, she has gifted an amount of Rs. 5 lakh in your favour out of love and affection.
This is more than sufficient and there are no chance of her trapping as feared.
Nadeem Qureshi
(Expert) 15 January 2012
Dear Rajesh
Mr. Makkad & Mr.Arunagiri is rightly explained, I agree with them
Devajyoti Barman
(Expert) 15 January 2012
rightly advised above and I agree with them.
A V Vishal
(Expert) 15 January 2012
My mother wants to gift me Rs. 500000\- in cash. She is housewife having PAN card but never filed ITR since income is always below exemption limit. She is not having bank account. Is it acceptable to get that much amount in cash? I know it will be tax free for me but is there any chance of her getting trapped in Legalties of Income Tax considering she never filed return and does not have Bank account.
I fully agree with Mr RR, even going by your arguement that So for these many years it is not difficult for any to accumulate that much cash, I don't think anybody will hold so much cash on person, she must be having some bank account or FD etc... hence it is wise to accept the gift in form of an account payee cheque with a gift deed stating the gift.
I could have taken that as Interest free loan but sec 269T and 269SS prohibits loan in cash above Rs. 20000
There are numerous case laws wherein courts have stated that loans can be accepted from immediate family members in cash.
Deepak Nair
(Expert) 16 January 2012
I too endoese the views of Mr.Arunagiri and Mr.Rajkumar Makkad
Anirudh
(Expert) 16 January 2012
Agreeing and endorsing is ok. But is it based on any legal backing or simple riding on piggy-back?
B.Chakrapani Warrier
(Expert) 16 January 2012
It is difficult to convince the tax authorities, if called upon, the source of Rs. 5,00,000/- for a housewife having no bank account and no taxable income. Prima facie the situation will be treated as a cooked up issue ,in the eyes of law,for want of corroborative evidences.
Shailesh Kr. Shah
(Expert) 16 January 2012
you can accept according to advise by ld. experts. But remember one thing, you have to prove before tax authorities for such transaction.Do home work also that how said money is saved by your mother.
prabhakar singh
(Expert) 16 January 2012
Most welcome!!!!!.
I agree transaction have every chance to be questioned.Split money to have it from many more relations.There is a long list of freedom.
soumitra basu
(Expert) 17 January 2012
In my opinion it shall be better to get the money as loan. Firstly, you can deposit the money to the savings bank account in instalment and take a cheque from your mother. Alternatively, you can go to any bank and make Banker's Cheque by paying cash. The said cheque can be deposited to your bank account.
It is just impossible to prove concerning all probabilities theory that your mother has kept Rs. 5.00 Lacs in cash at her house.
R.Ramachandran
(Expert) 17 January 2012
I am afraid.
If you deposit even in small amounts into the sb a/c. ultimately the amount so deposited will exceed he exemption limit and would attract income tax. Naturaly, while filing the income tax return, the source of income needs to be dislosed, which I think is impossible in your case.
It is also not possible to pay Rs. 5 lakhs across the counter and get Banker's cheque, without indicating PAN number on the deposit slip, and without attracting the attention of the IT department in regard to high-value transaction!
There is no immediate solution to your problem. At best it can be spread to three years - keeping in view the exemption limit which your mother may enjoy in a given financial year.
Vineet
(Expert) 21 January 2012
Really strange. How does it matter whether the gift is received in cash or cheque? Ultimately you have to explain genuineness of this gift which includes creditworthiness of the donor.
Gift by cheque indeed creates a colour of genuineness on transaction but in no way absolves you. If huge cash is found to be deposited in cash in your mothers account before gift or post gift you deposit cash in your account, both pose the same problem. Even cash loan will also need to explained from source point of view.
Suggestion: file returns of your mother for last 2 years i.e. AY 10-11 and 11-12 immediately showing income just below taxable limit or pay nominal tax. The returned income plus current year income plus some past savings minus some reasonable expenses can then be deposited in bank account in current year itself in 2-3 trenches. Make a FD of the same. Wait for end of the year and continue to regularly deposit some cash in bank as regular income. wait for the year to end and you can take gift next year from maturity proceeds as well as saving account accumulation. Don't forget to file return next year also.
M/s. Y-not legal services
(Expert) 16 January 2012
