|QUERY:||‘X’ has taken one lakh rupees as a Cash Gift from his own brother’s son, whether taxable or not?|
|ANSWER:||Section 56(2)(vii) of the Income tax Act, 1961 reads as under:
“Where an individual or a Hindu Undivided Family receives, in any previous year, from any person or persons on or after October 01,2009 :-
b) any sum of money, without consideration, the aggregate value which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; -----------
Provided further that this clause shall not apply to any sum of money or any property received –
a) from any relative; or -----------------
Explanation - For the purpose of this clause –
a) “relative means –
i) in the case of an individual “
(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 either of the parents of the individuals
(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 items (B) & (F);
Thus from the above, it is clear that a gift received from brother’s son (nephew) over Rs. 50,000/- is liable to tax in the hands of the ‘X’. As the gift is more than Rs. 50,000/-, the whole amount is liable to tax in the hands of ‘X’.
|EXPERT:||CA. H. N. Motiwalla|
|CATCH WORDS:||cash gift, HUF, income from other sources|
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Credit: Several of the queries and answers are reproduced with permission from the AIFTP Journal. We thank AIFTP for generously allowing us to host their research material.
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