RE:gift tax
by Amitabh on Apr 25, 2007 11:00 AM Permalink
The act says-Gifts received from relative is exempt from tax,then it goes to define relative as a person who is in so and so relation to the individual.It means that the individual is the recepient of the gift.In any case,tax is now levied on the recepient,not on the donor.Lineal ascendent or descendent is the person who is above or below him in the parental hierarchy,like father,son,grandfather,grandson,etc.
RE:gift tax
by Amitabh on Apr 24, 2007 12:35 PM Permalink
Gifts received from the following relatives are exempt from tax irrespective of the amount received. 1.Spouse of the individual 2.Brother or sister of the individual 3.Brother or sister of spouse of the individual 4.Brother or sister of either of the parents of the individual 5.Any lineal ascendent or descendent of the individual 6.Any lineal ascendent or descendent of the spouse of individual 7.Spouse of the person referred to in points 2 to 7.
It must be remembered that there may be cases where A is a relative of B in terms of this section and can give a gift of any amount to B but B may not be a relative of A satisfying the above definition.
RE:gift tax
by Anand Mokashi on Apr 30, 2007 01:54 PM Permalink
suppose MR A 's income is 15 lakhs from his business and he gives rs 5 lkahs each as gift to his married daughter and son so can MR A's taxable income gets reduced to rs 5 lakhs ?
RE:gift tax
by Amitabh on May 01, 2007 09:57 AM Permalink
No,your taxable income does not get reduced by giving a gift to anyone.So his taxable income will remain Rs 15 lakhs but Rs 5 lacs given as gift will not be taxed in the hands of his married daughter and son as they are his relatives.However,even if he gives a gift to a non relative of this amount,the gift will be taxed in recepient's hands but his taxable income will remain Rs 15 lacs.Pl remember one thing - The donor's tax liability is NEVER reduced by giving a gift,whosoever the recepient.Whether the amount will be taxed in the hands of the recepient or not is a different question entirely.It depends on whether the recepient is a relative or if not,whether the total amount received by him as gift exceeds Rs 50,000 or not for the year.
Hi, I am studying in Europe and I have a scholarship. I send money to India as and when required by my family. Do I need to pay tax for this remittance? If I get a job in Europe and also send money to home then what will be the taxable amount for me? Thanks for your replies in advance.
RE:Is my remittance taxable?
by Amitabh on Apr 24, 2007 07:26 AM Permalink
Scholarships are exempt from tax in India.Gifts to relatives as defined in the income Tax Act are also exempt from tax.So no tax to be paid in india for the remittance.If you get a job in Europe you will be taxed in Europe only,not in India even if the money is later on remitted to India,provided you remain a non resident in India.
RE:Foriegn Remittance
by Amitabh on Apr 23, 2007 01:36 PM Permalink
Gifts from relatives as defined in the Income Tax Act for this purpose are exempt from tax.
RE:Foriegn Remittance
by Amitabh on Apr 23, 2007 03:05 PM Permalink
Yes,parent's own brothers and sisters are included in relative.Even if the amount is rs 2.5 lacs it will be exempt.
Thank you rediff for the excellent article. it is worth preserving for future references. Keep it up and publish such educative ones instead of articles on abhi-ash marriages covered daily
RE:Excellent Article
by ganapathy subramanian on Apr 28, 2007 08:16 AM Permalink
Ash-Abhi marriage is also important considering the fact that this Ash's 4th Marriage
RE:Criteria to be a Hindu Undivided Family
by Amitabh on Apr 23, 2007 12:42 PM Permalink
If two or more persons have inherited from a common ancestor and the property with respect to which income is received belongs to the family,then the family may be treated as HUF.And in respect of income from such property,HUF will be treated as a separate taxable entity.The manager or karta of the HUF,who will normally be the seniormost male member of the family will be responsible for filing tax returns,etc.However,formation of HUF is allowed only in case of Hindus,Sikhs and Jains.
RE:Criteria to be a Hindu Undivided Family
by SOUNDARARAJAN DORAISAMY on Apr 23, 2007 06:42 PM Permalink
It is rite. But the HUF so formed should consist atleast one male member of the family.That is female memmbers of any family could be members but not permitted to file returns.
RE:Gratuity and PF amount taxable?
by Amitabh on Apr 23, 2007 10:47 AM Permalink
No,if the amount is within the limits as laid down in the Income Tax Act.
Hi, I'm a Central Gov't employee on a study leave for my PhD in geochemistry at Perth,Australia.I am also the receipient of the International scholarship from the University which pays for my tuition fees and gives me a living allowance.I have completed one and half years of my study. What are my tax liabilities?
RE:tax liabilities
by Amitabh on Apr 23, 2007 10:49 AM Permalink
Under Indian Income Tax Act,scholarships are exempt from tax.Since you are a non resident in this period,income accruing/received by you outside India will not be taxed in india.
RE:tax liabilities
by abhijit das on Apr 23, 2007 03:25 PM Permalink
Thanks so much. But study leave entitles me my full salary for 2 years,which my family is drawing presently. Also can you please state the IT rule/clause so that I can cite it in future references? Thanks once again!
RE:tax liabilities
by Amitabh on Apr 23, 2007 05:00 PM Permalink
The salary that your family is drawing in India is taxable in your hands as that income is being received (and even accrued) in India.Scholarship is exempt under Sec 10(16) of the Income Tax Act.For definition of resident/non resident and taxation implications thereof,refer to Sec 5 of Income Tax Act 1961.
RE:tax liabilities
by Amitabh on Apr 23, 2007 05:08 PM Permalink
For getting the definition of resident/non resident you may see Sec 6 of the Income Tax Act 1961.Also,the taxability issues discussed here are relevant only from Indian law.It may happen that you are taxed in Australia on the amounts received there and also on the salary you receive in India if you are Australian resident as per their tax laws.If this be the case,you will have to look at the double taxation avoidance agreement,if any ,between India and Australia or any other provision in the Australian law that gives you credit for the tax you pay in India on your Indian salary.
In the past one could send monetary gift to any blood relative, without worrying that the receipients will also have to pay taxes( the donor has already paid taxes on this amount in a foreign country).The new law puts restrictions on the term"relative".Now people are reluctant to send money, It is a net loss to the country, as the country loses valuable foreign exchange and net money inflow in the country (No product or services go out of the country).The law should be changed, so that one can send money to any blood relative(without worrying that the receipients will also have to pay unnecessary taxes). I hope the finance minister reconsiders and changes the definition of relative to any blood relative.
RE:Gifts to blood relatives and gift taxes
by Amitabh on Apr 24, 2007 01:33 PM Permalink
Not only that.The most ridiculous part is that a situation may arise that A is a relative of B and can give gift of any amount to B which will not be taxed in B's hands but B may not be a relative of A and so A will not get the benefit of exemption if he receives gift from B.Is this not strange ?
RE:Gifts to blood relatives and gift taxes
by Ahmed Ali on Apr 24, 2007 10:56 PM Permalink
Thanks for your reply and observation.If only the finance minister reads and acts on it.
Hi, My brother & sister are settled abroad. they want to give aprox.Rs.25lacs to help me getting a house for myself.I am a H/wife with no income. kindly reply to:- coockoo@rediffmail.com Thanks CK.
money sent as gift to niece, nephew, their spouses and children---Is it taxable to them in India ? I have already paid income tax on this money in U.S.
RE:Gift to niece, nephew and their children
by Amitabh on Apr 22, 2007 09:47 AM Permalink
Gifts received from relatives as defined under income tax law are not taxable in the recepient's hands.
