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.
