Gifrs from Relatives

[areng...@eapl.biz]

Dear Members

I have written brief note on  gifts from relatives which are exempted  as per Section 56 (2) (vi)  .  Kindly give your feedback  and  views are also invited based on this article.  



GIFT FROM RELATIVES ARE TOTALLY EXEMPT:  ANALYSIS


 In Income Tax  under Section 56  that  Income of every kind which is not  to be excluded from the total income  under this Act shall be chargeable to income tax  under the head  Income from other  sources.    The sub section provides  certain types of income shall be chargeable to Income from other sources i.e. Dividend, Income from  Machinery which is not chargeable under the head Profits and gains of business or profession, and other incomes referred therein

Clause (VI)  of Sub  Section (2)  of Section 56    shall not apply  to any  sum  of money received  from the following categories


1)   from any relative  or

2) on the occasion of the marriage of the individual  or

3)  under a will or by way  of  inheritance or

4)  in  contemplattion of death of the payer (  all amounts received  on the death of a person as a part  of the inheritance )  or

5)   from any local authority as defiend in the Explanation to clause (20) of  Section 10  or

6)    from any  fund or foundation or university or other  educational institutional  under section 12AA
 
Relative under Section 56  (2) (vi) of Income tax Act


a)  Spouse of the Individual

b)   Brother or sister of the Individual

c)   Brother or sister of the spouse of the individual

c)   Brother or sister either of the parents of the individual

d)   any lineal ascendant or descendant of the individual

e)   any lineal ascendant or descendant of the spouse of the individual

f)    spouse of the person  referred to in cluases  (  b  to   e)


Any sum received from relative are totally exempt from tax whether in cash or in kind.  However  non relative  and  non specified persons  in excess of Rs.50,000/-  would be liable to  income tax only when the gift  is a sum  of money whether in cash or  by  way of cheque or  a  bank draft  .  Moreover gifts in kind such as  a gift  of shares, gift of land,  gift of houses, gift of units or  mutual funds , jewellery etc would not be liable to any income tax at all.   .  
 








Regards

A. Rengarajan