No,Ahmed.It is not like that.You see,if I earn some income and pay tax on it and thereafter I give a gift to you.Then it becomes your income,isnt't it ? You are not my relative.My earning an income and taxability of that income and my giving of gift to a relative or non relative and the taxability of that amount in the hands of recepient are two entirely different issues.The question of double taxation would arise if the same income is taxed twice in the same hands.If I receive something,I will have to pay tax on it,if the law so requires.If I give a gift out of that income,the gift will become the recepient's income and whether it will be taxed in his hands or not again depends on the law.Whether I am a relative of the recepient and whether the amount received by the recepient overall excedds Rs 50,000 or not.And yes,one thing has to be very clear-there is no reduction in the tax liability of the donor by giving any gift,never.It is immaterial whether the amount is exempt in the hands of recepient or not.
