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POSTED BY Jagoinvestor ON March 4, 2013 COMMENTS (1,036)

Do you know that, when someone deposits some money in your bank account, what is its taxation angle ? A lot of people take some loan from their friends for few months and then return it back, but never think twice about it from taxation angle? Your parents deposit some money to your bank account because you want to pay the down payment of your house. While it’s a help from your parents, have you ever thought if you have to pay tax on that amount or not?

In this article lets see all the aspects about these kind of transactions, when money comes and goes out of your bank account and what are the rules for income tax on gifts received from relatives or other people in India .

Taxation on Gifts

Let us first see what kind of situations we are talking about ?

  • You swiped your credit card for your friend Rs 20,000 purchase and then your friend paid back money to you by transferring it to your bank account.
  • You asked Rs 50,000 from your friend as loan and paid him back after 1 month.
  • You got Rs 50,000 cheque from your relative on your wedding.
  • Your father transferred some money you your bank account as help for some purpose.

These are few instances, which happens in our lives. But its very important for you to understand the tax implications in various scenarios and the possible issues which can come up in the future, if income tax department decides to scrutinize your income tax returns for example. By understanding the gift tax rules and precautions to take, you will be safe. So now, let’s look at 5 points which will help you understand rules about incomes tax on gifts in a better way.

By virtue of Section 56(2), any sum of money exceeding Rs. 50000 received without consideration by an individual or an HUF from any person is chargeable to tax as income under “other sources” subject to some exclusions . Below we are going to see all those exclusions and gift tax rules.

1. Upto Rs 50,000/year is not taxable

The first major rule which every person should know is that there is no tax to be paid on gifts received (cash or kind), if the amount of the gift is upto Rs 50,000 in a year. However if the total amount crosses Rs 50,000 . Then you will have to pay the tax on the total amount received (not additional). For example – If a friend of yours gifts you Rs 30,000 in a given year, you don’t have to pay any tax on that amount, as its below the limit of Rs 50,000 .

Now suppose you also get Rs 20,000 after that, still you don’t have to pay the tax as the total worth of the gift you got in the year was Rs 50,000 till now (less than the limit of Rs 50,000) . But now, if someone gifts you another Rs 10,000 . Your total gifts in a year is Rs 60,000, so you will have to pay tax on the total amount of Rs 60,000 , not just on additional Rs 10,000 . This Rs 60,000 will be included in your income and you will have to pay tax on this Rs 60,000, as per your tax slab. Note that this is exactly how the written law is.

Since 1/10/2009, Section 56(2) has been amended and the scope of ‘’gifts’’ will include even immovable properties or any other property besides sums of money under its ambit.

2. Any amount received by relatives is not taxable at all

Another rule for income tax on gifts, is that any amount received from specified relatives is totally tax free in the hands of recipient. So if a relative gives you gift in form of cash/cheque or in consideration, you will not have to pay any tax on the amount received.

Following is the list of relations which are considered as “relatives” for this

  • Your spouse
  • Your brother or sister
  • Brother or sister of your spouse
  • Brother or sister of either of your parents
  • Any of your lineal ascendants or descendants
  • Any lineal ascendant or descendant of your spouse
  • Spouse of the persons referred  in above points

Example – So if you want to buy a house and your father/mother/sister/brother etc transfer Rs 20 lacs to your bank account. You don’t need to worry about the taxation part, because its a gift from your relatives and you will not have to pay any tax on this amount. However its a good practice to do the documentation for this, if the amount if pretty big like in this example. All you need to do is document this transaction on a paper which clearly states that who transferred the money and the reason for it, along with the signatures of both parties. In future, if there is any income tax scrutiny , this small piece of proof will be handy and will help you a lot.

Important – Note that, there is no income tax to be paid on the money received from relatives, however at times income clubbing provisions may apply, for example, if a husband gifts Rs 10,00,000 to wife, there is no ta to be paid by wife on Rs 10 lacs received, however when she invests that money and if any interest income is generated, it will be clubbed with husband income. Read all about income tax clubbing rules   here.

3. Any amount received as Wedding Gift is not taxable

One of the few advantages of getting married is that any amount you get, as wedding gift is not taxable in your hands, either from relative or non-relative 🙂 . So even if you get Rs 1 crore as wedding gift from someone in your wedding, it’s not taxable in your hands.

Lets see some examples –

Suppose if your spouse parents give you some gift worth Rs 10 lacs on marriage, it will be treated as a wedding gift and will not be taxed. However, it is not clear by provision, whether the gifts should have been on the exact date of marriage, or a few days before or later. Normally, it should be sufficient if the gift is given just on the occasion of the marriage, means either on the day of the marriage itself or a day or two before or after. Practical common sense view would prevail in such cases.

4. Gift Tax on Movable/ Immovable properties

There is a valuation aspect involved in gifting of immovable properties

  • If the property is gifted without any consideration then if the stamp duty value exceeds Rs. 50000/-, stamp duty value will be taken
  • If the property is gifted for a consideration, then the actual value of the property will be taken

In case of other properties:

  • If gifted without consideration and fair market value exceeds 50,000, then the fair market value will be taken as the final value
  • If gifted for a consideration and the Fair Market Value (FMV) less consideration is greater than 50000, then the FMV less consideration amount will be taken as the value of the gift.

5. No tax on the amount received through WILL or Inheritance

When any sum of money or any property is received under a will or by way of inheritance, it is totally exempt from Gift Tax. So if you get a real estate worth Rs 50,00,000 and some other things worth Rs 30,00,000 through inheritance , you will not have to pay any tax on that amount received.

Be cautious about the take and give transactions

At times, we ask for money from our friends for some purpose and then give it back. One of the examples I can give is what I heard from one of the readers in comments section. He swiped his credit card for a friend for Rs 50,000 and then asked his friend to pay him back through online banking. Here if you see, the amount came to his account, however it was a reverse transaction and not actually a gift, so ideally this transaction should not be considered at all.

If its a small amount and can be justified with proofs, there is not much to worry about this. But in this case, lets say there is a income tax scrutiny, and tax inspector asks you about this “Rs 50,000” coming to your account. Now – You can clearly say that the money you got from your  friend was a amount which you got back because you paid Rs 50,000 to him through your credit card. But just saying this will not be enough, He will ask you to prove it. Then you will have to bring your credit card statement, and prove to him that this was done by you for your friend and no one else.

gift tax rules in give and take

The point here is – no matters how truthful you are, there should be something you can show to income tax officers in case this is questioned. So for any transaction like this, which involves a big amount, its always a good idea to have a proof, like in the example I just gave, the credit card statement will be handy along with a small note, where you friend signs saying that you swiped your credit card for him and he will pay back the money through netbanking .

In this same case, If you ccan’tprove that this money was just a “reverse entry” , you can imagine the situation. Even if you were clean, the whole amount would be added to your income and you need to pay income tax based on your tax slabs on the ground of unaccounted income.

Another point, worth noting is that just because you have a reverse transaction, the other party can get into trouble. For example, suppose you give Rs 20 lacs to your friend, who wanted the money for buying a house and then your friend gives back those Rs 20 lacs in 3 months. Note that now there is a clear entry that you gave your friend Rs 20 lacs, so in future income tax department can reach you through your friend and ask you about this Rs 20 lacs and from where you got so much of money. They can ask you to justify the source of this money. So always keep these points in your mind.

How to document Gift transactions, Registered Deed or plain paper?

A gift deed is a deed, that is executed and delivered in which the donor transfers title to the receiver without any payment or considerations. It a document which transfer the legal title of the property to the donor, where the consideration is not monetary but is made in return for love and affection. There is indistinctness with respect to compliance of the gift deed at times, Whether a gift deed is required to be made in every circumstance

When it is required to be stamped OR get registered?

Gift made by way of cash or cheque does not mandatory requires to be executed through a gift deed. Writing a plain typed note on a paper will generally suffice. It is not required to be stamped and registration is also not needed. You may simply mention the names of persons, their relation and that the gift is being given out of love and affection.

Gift made by way of movable property is required to be made in stamp paper and stamped by the notary or court, and registration of gift deed is not required in this case. For the purpose of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor. Gift of immovable property which is not registered is not valid as per law and cannot pass any title to the receiver.

Conclusion on Income Tax on Gifts received

As far as you make the transactions which can be justified, there is not much to worry, however its always a good and safe practice to document things on a paper with proper signatures. This will help you because income tax scrutiny can go back to many years of your life. The stronger your documentation and proof, the smoother will the situation be.

Thanks to Rishabh Parakh (www.rishabhparakh.com), a chartered accountant who helped me while this post and gave his inputs. He is founder  director of Money Plant Consulting (www.moneyplantconsulting.net ) a leading Tax & Investment Advisory service provider in Pune.

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1,036 replies on this article “Gift Tax in India – Everything you wanted to know about rules and exemptions”

  1. Harsh says:

    Greetings of the day!

    I am a working professional, and the following is my situation:
    1. I pay HRA to my grandfather (maternal), let’s say INR 6 lakh.
    2. My grandfather (maternal) send this money to my mother’s account as a gift.
    3. My father sends me the same amount (INR 6 lakh) from his bank account, i.e. both my father and mother have a different bank account, and consider it as a gift.

    This way I can, indirectly get the money back that was paid for the claim of HRA. Will it be legal ? Do I have to pay any tax in this scenario?

    Thanks, looking forward to your response.

    1. You cant claim TAX DEDUCTION for full amount of HRA actually.. Most of the times its lower than HRA amount.. So how are you benefitting ?

      Because you will anyways pay the tax applicable .. After that you are sending this to grand father and getting it back from father. I dont see enough benefit

      Manish

  2. Lewis Janardhan says:

    Hello Sir,
    I am a student and i have a hypothetical scenario that i want to clarify, suppose A’s brother/sister wants to transfer 20-30 lakhs money to A’s son/daughter who we can imagine is an adult who is an income tax payer. in that case what needs to be done and as this amount is more than 50000 does A’s child be required to pay any tax or something. Sir i am a law student and this was the question asked to me in one of our exams, i could not answer it, can you please let me know the answer to this question ?

    1. I dont think the kids need to pay any tax in this case!

      Manish

  3. Bhupender Singh says:

    Hi,

    Thank you so much for the detailed post.
    I have a question and I really want you to answer it.
    I am an IT professional working since 2 years and my father is in Indian Air Force he was posted to another state.
    We were buying house in Delhi worth 32 lakhs, and due to covid I am working from home in Delhi (we currently live on rent) and here builder is asking for money partially in online and some in cash. So what we have decided is to transfer some amount in my bank account and I can pay him using online transaction as it was easy and I can verify details and everything as he lives here only. So my father transfer 15 lakhs to my account in small installments and I paid the builder using net banking. Is there any kind of tax related scrutiny can happen on me ?? Like so much money inflow and outflow in 2 months only…etc etc..
    and Also, If we pay rest of amount in cash is it legal on our behalf ?? Because I know builder want that part in cash because he wants to evade tax but should we be worried for taking cash from our bank account ??

    Thanks.

    1. The scrutiny can surely happen as tax department just looks and numbers. But you dont have to worry much because there is no tax angle here.

      You can tell them exactly what happened .. that your father just transferred it to you and you are paying it. Nothing will happen

      The only thing which can happen is that they can ask your father if that money is white or not and if your father has been paying his taxes and returns properly and can justify it then there is no issue.

      Also if you pay cash to builder, its again not an issue for you. Paying and taking cash is not a crime. Not paying tax on the income is crime. So its the builder issue if tax department finds about that.

      Manish

      1. Bhupender Singh says:

        Thank you Manish,

        I appreciate your super fast reply.
        And regarding my father paying taxes yes he is paying because in Defence services they deduct it and then give salary.

        Thank you so much for the answer.

        1. In that case you have nothing to worry as everything can be explained ..

  4. Jaek says:

    Hi Sir,

    My name is Jaek and I’m an Indian. I work for UK for past 5 years. There is no office in India and the only office is in UK. I work for them (IT professional) from India. They are sending money thru Money Gram. I receive nearly $10000.00 per year. How to pay tax? what would I do? How much should I pay tax? after they sent money through Money Gram, I will reach local finance service and then they would transfer through IMPS. Ex : IMPS transaction from xxxx finance. So, it does not show that where exactly that money would come from. it should be local finance service send an IMPS transaction. Please help me. Thank you.

    1. There is no confusion.

      Its your income in India and just pay it as per your slab.. Check with a CA if it gets complicated!

      Manish

  5. GANESH HARI PATIL says:

    Hi Manish,
    I earn 10 to 15 k Rs in share market per month and for that i am paying profit sharing with one broker company regularly.
    due to every week/month transaction with those broker, is there any legal action will take place or it is all legal.
    your reply is appreciated .

    1. Nothing is illegal here .. Just that its your income so you are paying the tax on the whole thing.

  6. Ajay says:

    Hello Sir,
    I received 4lacs rupees from my father as a cheque which I invested as a NSC for 5 years. Am I required to pay any tax on amount received from my father?

    1. No you are not. It will be treated as GIFT ! .. nothing to worry!

  7. SKumar says:

    Hi,
    I have been a regular reader of Jagoinvestor articles and highly appreciate the quality of content provided. I have one query that “if son gifts ‘x’ amount to mother and mother gifts the same ‘x’ amount to his son’s spouse, will it be illegal as son gifted to mother and mother gifted to daughter-in-law? What would be tax implications or clubbing provisions in that case?

    Thanks and Regards

    1. Yes, there will be clubbing provisions applied here..

      Its clear that husband is just giving the gift indirectly to wife only to avoid taxes using the pre-text of gift rules.. This will attract gift tax!

      1. shelly says:

        Hi Sir,
        In case a adult child receives a cash gift from a grand parent, then will the income he earns on that gift amount be clubbed with the income of the grand parent?

        1. No, it will be the child income.. income tax clubbing will not apply

  8. ARUN GUPTA says:

    IF I GET A GIFT BY CHEQUE FROM MY REAL MARRIED SISTER, WILL I HAVE TO PAY TAX AND WHAT ARE THE FORMALITIES TO BE COMPLETED, IF ANY, FOR SUCH GIFT. IS THERE ANY LIMIT OF AMOUNT TO GET GIFT FROM REAL SISTER

  9. shahrukh says:

    Someone has sent me a gift as $ 45000. Someone has call from Mumbai.They are saying that I have to pay 78500 rs. registration fees. Do I really have to pay this fee or will I get this amount directly and somewhere it is not a fraud

    1. Its a fraud !

      Why have they given you this money, Why do they love you so much !

  10. Sir, I want 70 lac money from my relatives and friends in partly for purchase of house property. They transferred the money in to my saving bank account. Will I pay the tax of same amount? Any query ask by the income tax department to me.

    1. no tax.

      its loan.. not income

  11. Ranjeet Kumar Jha says:

    Hi Manish

    My mother given a cheque Rs. 10 Lakh for gift , any personal use. I need a Gift Tax laiability.?

      1. Joy says:

        Can i need to submit proof on that?

  12. Rohit Kumar says:

    Hi Manish ,

    My wife has given 3 l to her sister as gift which her sister has deposited in her account .My wife has got this money from saving which she does from household savings over the years from monthly money which i give her in cash .

    Now her sister has received income tax notice asking about this money . Will this come under gift ?

    1. Yes this is GIFT .. Your sister will not have to pay any tax. However tax authorities might ask your wife how did she get this money and tax is paid or not. For that you should be ready !

  13. Abhishesh says:

    Hi Manish,

    Does the gift amount have to be reflecting in Income Tax Filing. If so, under what header/section?

    1. Hi Abhishesh

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

    2. k. gowri says:

      A brother who is a citizen in US sends one lakh per month to her sister and Rs. 2 Lakhs to
      his mother thru bank account. is it required to file a ITR for a mother and sister as it is a gift exempt under sec 56. if not filed, what are the consequences

      1. Yes, they need to file the ITR. Even though tax will not be there, but ITR has to be filed and gifts needs to be mentioned!

        Manish

  14. Susanth Roy says:

    My wife is working in abroad and sends me 50-60thousand monthly do I need to pay tax

  15. Hemal Upadhyaya says:

    My sister’s marriage and my son’s Janoi was on 1st to 5th of February 2013. At this occasion we received big amount of cash as gift from our relatives in form of covers and chandla, can I deposit this amount in bank, is it taxable?

    1. Yes, you can ..

      Just make sure you make a list of all people and amount given by them.

  16. Suresh says:

    I got money worth Rs.5,00,000 from my father in law in August 2015 on occasion of my marriage.I’m deposited that amount in September 2016 as fixed deposit.Is it taxable or not?How can I show this amount in my assessment.Plz reply.

    1. Its not taxable, but the interest you earn will be taxable. You need to talk to CA on this .

  17. Prakaah says:

    Sir, I am working in private sector with annual income of 4 l per annum, for which I do pay the tax, but along with this my sister sends money Into my account twice or thrice a year(around 1.5 lacs)..I use this money to prepay my home loan and to invest In mutual funds.. do I have to pay the taxes for this gifted amount.. and also for this do I have to take any actions specifically.

    1. No, you dont have to . It will be considered as GIFT

  18. saikiran says:

    Hi Manish

    My father sold a land for an amount and the market value is of 5 lakhs. Buyer would prefer to give it via Check.
    This money is needed for my sister marriage
    How could i exempt this money from tax, I heard about giving this cheque to my sister acc would relieve me from paying tax as a gift for her marriage

    1. NO,

      The amount you gift is AFTER TAX income, so when you sell the land for 5 lacs, first you need to pay applicable taxes and whatever remains can be gifted. I dont think there is any escape from this.

  19. SG says:

    Hi Manish,

    In July 16, I have given a cheque of 8 Lacs to My Brother as he had plan to buy some property and buy items to run his small shop . He deposited cheque in his account and withdrew Cash . However he could not use and after demonetization he wants to deposit it back to his account and give me cheque back .
    Can he do that . Is there any Tax Liability on this for him or me . Also do we need to keep any documentry evidence other than the account statement . Thanx

    1. No, he can surely do that because he can show that there was cash withdrawl of 8 lacs from account and thats being deposited back now. However this might attract the tax enquiry, but dont worry if you have not done anything wrong !

  20. sanjay desai says:

    Can my father or mother give gift cheque of Rs. 1 lakh to my wife. is it taxable?
    can i give interest free loan to my wife from my saving account & my huf account to invest her in bond.

  21. Navin says:

    Hi Manish,

    What is the yearly limit of amount a friend can send it from abroad to an Indian account via online transfer.
    In some articles I found up-to $14000 yearly is tax exempted.

    1. I am not clear on this, hence cant answer this

  22. Amit says:

    Hi Manish,

    Pls tell, the amount received during Birth of my Daughter in name of Her and myself from relatives, does it attract any Income tax , is their any limit on such amount received?

    1. Yes, it will attract income tax.

  23. sonam says:

    Hello Manish……..My father gave Power of attorney to my name a month back now i am selling that property which is around 25 lakhs ……am i liable to any taxes??

    1. Hi sonam

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  24. Sathish says:

    Am a stock trader. . One of my NRI friends is willing to lend me 10 lakhs for my business through wired transfer. Would like to know how do we document it appropriately, as he is not the blood relative. Does FEMA affect this any way?

    1. Hi Sathish

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  25. T Madhob says:

    We, an organization of a Local Traditional Lord, if sold a land to a schedule tribe at Rs.,75 lakhs by transferring through bank cheque. Is it taxable by the purchaser or the seller ? Please help us from your good service.

    1. Hi T Madhob

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  26. Hariharan says:

    Hi Manish,

    Am I liable to gift tax if my father’s elder brother finances me for purchasing a car.

  27. pooja says:

    My husband stays in US.. He has been transferring money to my savings account in india.. is that taxable in india? What’s the limit for transfer?

    1. Hi pooja

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  28. Srikanth says:

    Hi Manish Chauhan,

    My in-laws sold agriculture land for 10 lacks cash (old 500 & 1000 rs notes) after Nov 8, 2016 and same old note have been given to my wife.
    1. Can she deposit the complete old cash in her Bank A/c?
    2. Is it Taxable?
    3. Can this amount be considered as gift, if it is then what is the procedure, please advise.

    1. Surely its taxable ! .. Its income right ! . so its taxable .

      Yes the amount can be considered as GIFT, but GIFT has to come after paying tax. So if taxes was not paid, it has to be paid now !

  29. Ashok says:

    Manish,
    You’ve written a informative article, thanks for your time and thanks for educating me on this.
    I have few queries:
    If I want to gift cash (through account) to my uncle (My Father’s own brother) is there any limit?
    If I want to give hard cash as a gift is it allowed? if yes, what is the limit and procedure?
    Me and My uncle if we both write the gift details in white paper and sign it will it be enough?

    Thanks,
    Ashok

    1. There is no limit on the GIFT. You can give any amount. However note that it will come out of your POST TAX income, you cant save tax by giving gift !

  30. Krishan says:

    Hi
    I am OCI holding citizenship of Canada earning Interest From NRE it is not taxable in India I know but is it compulsory to file tax return in Indian Income tax return & must to show in tax return while other income is below taxable.

    1. Hi Krishan

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  31. Jogender says:

    Dear Manish

    I have given an amount to brother of my spouse last year which i could not documented.

    Please advise me what I have to do now, Can it be counted a gift to relative or what will be tax implication

    Regards

    1. Yes it can be counted as GIFT, but you cant save tax on that !

  32. Rakesh kumar says:

    Dear Manish ,in october 2016 my grandfather gave me chq of one lac as a gift to me and 50,000 cash to me ,if i can deposit it in my account and if it is taxable

    regards

    1. Yes, you can deposit. No tax will be applicable

  33. Ashish says:

    Hi..
    My Wife Gifted Me rs 5 Lakh in the form of cash & the same Was deposited in My Business current Account..Let me know Tax Liability On Both the side & Also let me Know Can i give interest in Future For said Amount

    1. Hi Ashish

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  34. dsouza says:

    Hi Manish,

    My sister stays in Australia and she wanted to transfer money to my account,around 30lakhs. Do i have to pay tax for this amount. This money will be for my use. For me to buy a property

    1. Hi dsouza

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  35. sachin says:

    Hi Manish,

    I am in USA and planning to buy a house / property in India as an investment.Can I send money to my Father/Mother/In-laws account to purchase the land/property which later I will transfer on my name/wife’s name once we will return back to India.Does the transferred money to my parents will be taxable now or in future if they will transfer the Land/Property back on my name/wife name will it be taxable during that time.

    1. Hi sachin

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  36. nick says:

    we have just been blessed with a baby and the baby has received cash gifts worth approx 65000 Rs.
    of which 53000 is from my parents, dads brother n brothers wife, moms brother and sister , my brother n his wife, my wifes sister and his husband…… basically all blood relatives
    rest is from friends and community
    how will the tax rule apply on depositing this in the baby’s account

  37. jogender says:

    Hi Manish

    I am a NRI, I have given Rs. 5 lack to my spouse brother through Cheque from my NRE account.

    Now he want to return it by way of cheque.

    what will be the tax consequence

    1. Nothing .. its just a give and take ..

  38. Aman says:

    I have created an HUF ( me wife & son). I( karta) have received Rs. 5 lac cheque from my parents . I want to deposit the same into HUF account . Will it be taxable as the amount s more than 50000?
    Or
    I if I route this amount through my account to HUF
    Whether I have to include this amount in my tax return as you said GIVER can never save tax.
    Please guide me

    1. Hi Aman

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  39. Naved says:

    Hi Manish

    I went though your article as well as the comments below. It was very helpful and I am amazed to see that you take the pain to answer each and every query individually. Thanks a lot. In current scenario this really helps a lot of people who does not understand the nitty-gritties of income tax.
    I have a query of my own too. I have two kids aged 7 and 2. Over the years they have received cash gifts from various relatives which we never spent and the amount now is closed to 2 lacs. How can we submit this in bank. should we open separate accounts for each of them and then submit there?

    1. Yes, I think it would be good idea to open 2 accounts and deposit 1 lac in each ..

  40. Gaurav says:

    I have became a lucky winner on my Bank’s debit card for which Bank is gifting me a LCD TV worth Rs18,000. However it is asking me to pay Rs 6000 towards gift tax. Is it correct that the Bank can ask me for such a tax as amount of gift is less than rs 50000? Is it some other tax but gift tax that the bank is asking me to pay?

    1. Hi Gaurav

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  41. Jaya says:

    hi manish,
    My father is 69 years old. My Father retired in 2008 (9 years ago) now he has Rs.250000 on his hand. Can we deposite this money in his account and than take gift cheque his son’s account ? there any income tax occur on me and my brother’s income or gift received from my Father?

    1. NO, there wont be any tax for you

  42. Senthil says:

    Hi,

    I am in US and I need to transfer money to my parents from my earnings here. Should my parents pay tax for this amount? Thanks.

    1. Mostly no, but I suggest you consult a CA

  43. Krishna says:

    Hi Manish,

    I have a different query with respect to tax on Capital Gains..

    My father purchased a land worth 14 lakh in year 2006. It is given for development to a Builder and got 4 flats in return during the year 2015 . Now, my father wants to sell one Flat (out of the 4) for amount 35 lakh and transfer 20 lakh to me as a gift.

    I understand that I will not have to bear any tax as the gift from relative. But, my query is with respect to tax my father has to bear in this financial year.

    Please suggest:
    1) Will the capital gain on the property (i.e Flat) sold becomes Short Term or Long Term (as it involves the GPA given to the Builder and the Builder allotted the Flats in return, will it anyway become Short Term Capital Gain?)
    2) How much will be the Capital Gain amount in this case while the other three flats continue to be in the name of my father?
    3) Is investing the Capital Gain amount on the Shares save tax?

    Thanks in advance,
    Krishna

    1. Hi Krishna

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/pro

      Manish

  44. Sharath J says:

    Hi Manish,
    Thanks for wonderful analysis.
    Currently i am looking to buy a site in Bangalore, registering it with myself+spouse name and have below concerns
    1) Broke FD which was in my Father’s name(Retired amount) & transferred to my Saving’s account. Sum of Rs.18L. Will use same money to pay land-owner. Will this be considered as Gift from relative? if YES do i need to pay Tax for same ?
    2) Father-in law is planning to gift a sum of 15L via cheque to my spouse account to be paid for same property. Will this again be considered as Gift ? And if YES is it required for my spouse to pay Tax for same ?

    1. 1. Yes it will be a gift, and you wont pay tax

      2. Yes, no tax again !

      Congratulations !

      Manish

  45. Prem Bhatt says:

    hi manish,
    my grandmother was retired before 20 years ago, now she has Rs.300000 on her hand. Can i deposite this money in her account and than take gift cheque in my account ? is there any income tax occur on my this income or gift received from my grandmother

    1. No tax for you if she gifts it to you 🙂

      1. Prem Bhatt says:

        sorry i forget to say that my grandmother was a government employee and she received Rs.7000 pension per month . Every month she withdraw money from the bank and keep saving…she is now 88 years old. Should i deposite 300000 amount her account and take gift cheque in my salary account? Is there any Income tax query or tax liable? please suggest sir…

        1. Yes, you can deposit it without any issue

  46. AK Bhatia says:

    Hi Manish

    I transferred money to my mom account. She has done Fixed deposit with that. But now I need that and I am transferring the money back to my account by breaking that fixed deposit. Amount will be around 6 lakhs. So will it be taxable to me?

    Thanks in advance.

  47. Karan Anand says:

    Hello,

    My sister got married on the 11th of this month and we received a lot of cash as gift like it is the norm in India. Problem is most of it is in old 500 and 1000 Rs notes. Will I be able to deposit them in bank and get exemption on it.

    Thanks,
    Karan Anand

    1. Yes, you can ..

      All gifts you get in marriage are tax free . Just keep the record of how much was received by whom and thats all is needed in explaination

  48. Hi I, , let say ram is getting married in Dec, 2016,, and before modi’a declaration date I. e 8th Nov, ,, ram got 5 lakh cash as marriage gift, , will it be taxable. .??

    1. No , it will not be taxes. Its tax free.

      All he needs to do is make a list of people and how much gift was given to him by whom !

  49. Vijay says:

    Dear Manish,

    I have received 5 lacs cash as gift from my in-laws on birth of my son, prior to demonitisation by the govt. I will have to deposit the same in my ac before 30 dec. Can i deposit this money as gift received. What will be the tax implications on the amount deposited.

    1. Yes you can . It will be tax free

  50. Vicky says:

    My dad borrows money for my brother’s wedding from friends and relatives via cheques in his account.Now can he deposit the money which my brother gets in the wedding as gift in his account to pay back the creditors?? Or should the money be first deposited in my brothers account and then transfer to my dad’s account?

    1. If they are ready to accept cash, you can pay them in cash. If not, there is no other option but to deposit in bank and then pay

      1. Vicky says:

        The borrowed money is via cheques so would like to return also via banks. The query is that wether my dad can deposit the gift money in his account or would it be better to deposit it in my brothers account…..

        1. Do it in the account which does not have a regular income anyways !

  51. vikas says:

    My marriage done on 18april the collection of gift as money 5 lakh i have not deposit in bank till now please help i have deposit to bank is taxable or nt

    1. Gifts and money recieved on marriage is not taxable, provided you are able to prove that you got in marriage

  52. Pardeep says:

    If parents sell a house & money is invested in commercial property on son’s name. What will be the tax payable?

    1. Parents .. They bought and sold . So tax is applicable . Where they sold is not material here as its invested in commercial and not in residential again .

  53. Tushar says:

    Hello Manish,

    If I gift Rs. 20 lakh to my friend/relative on marriage, so it will not be Taxable to them.

    BUT,

    Will it be taxable to me. I mean do I have to show that I have paid Tax for those Rs. 20 Lakh?

    I appreciate your help.

    Thanks
    TJ

    1. The money you GIFT comes out of your taxable income. So you have already paid tax and then whatever money is with you can be gifted. So note that the GIVER can never save tax.

  54. Mitesh says:

    Hi Manish ,

    I take a loan from my friend who doing mba in Australia ,he sent money in my account 1,20,000 for my education ,is this amount is taxable or not. if it is then suggest how can I pay the income tax .

    1. No, its not taxable. Its a loan which you need to repay later .. Just make sure you have documents for this .

      Also you dont need to worry if total income per year is below 2.5 lacs limit

  55. Monika says:

    HELLO,
    I got married in January 2016, in which I received gifts in cash. which I did’t deposit in bank till now. Can I deposit it now as tax free income?

    1. Yes, you need to just mention that it was received in your marriage

      1. rajesh says:

        i was married in 2010 can i deposit money received in marriage now

        1. You can , but how will you justify never using the cash ? Is it practical ! . I think there is time limit to declare that cash . You cant do it years later !

  56. aman mishra says:

    Hi ,

    How to document gift in cash received from my spouse’s parents(which ITR , gift deed etc to be used). Also under which header should it be entered
    How many days before marriage can such amount be transferred in my account

    1. Hi aman mishra

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/solutions/ca-services

      Manish

  57. Mohan says:

    hi Manish
    I am leaving in thailand and i am working as a chef in Marriott international .
    i want ask ? you my Father planing to Build his own house and i want help them as a gift 30 lakh rupee .
    this sithuation is any problum from income tax Depatment?
    or My father have to Pay Tax?
    I am Tax Pyer in thailand?
    Thank you in Advancve
    Best Regard
    Mohan

    1. No , your father will not be paying tax as its a GIFT

  58. Vinu says:

    Hi,
    My mother brought a land in 2001 for 2laks and built a house in 2008 for 17 laks.
    Now she is selling it for 55 laks.
    The selling amount will be shared between mother, myself and my sister.
    I will buy a house with my share.
    Now, who all has to pay capital gain tax? In which way we can legally avoid it?

    1. Jagoinvestor Admin says:

      Hi Vinu

      Thanks for your Query .

      I would like to share an article from business today that will help you – http://www.businesstoday.in/moneytoday/tax/options-that-can-help-exemption-from-taxes-on-capital-gains/story/209776.html

  59. reena says:

    Please clarify.. whether clubbing provisions will attract or not in case of income earned from gifted money from relative in case of major children, spouse & parents…

  60. Joyce says:

    Hi,
    If my father sells off his property and if he want to give say 30 lakhs to me. Can he just transfer it to my account, will it have any tax implications for him or for me.

  61. Reshmi says:

    Hi,
    Please tell me if the gifts received from the company where I am currently working fall under gift tax or not.

  62. VANDIT PARIKH says:

    sir,if my father give me gift in cash on by marriage & If i earned some income by investing that cash.
    so tell me sir that income is clubbed in my Father’s income or not.
    note: Gift is more than Rs.50,000/-& me & my father both filing our income tax return.

    1. Sarabjot says:

      Since you are above 18, The income generated from the cash gifted by your father will not be clubbed with your father’s total income.It will be added to your total income.

    2. No , it will not be clubbed, because I think you are already major !

    3. vandit says:

      Message
      Tnks for your ans…
      ans..will remain same if I am minor &gift received from my father on my birthday….

  63. SK says:

    Sir,

    I want to give Rs. Six lacs to my son, to purchase a car, how to give him and is there any gift deed i have to create..

    1. You can just transfer the money to his account from your account. You dont need to do any documentation for that!

  64. Anthony says:

    If I receive a total amount of Rs 45000 or so from my various friends on my Birthday , is it taxaable ? aa

  65. Rahul S says:

    Hi,
    We(My mother, brother and me) sold a property and got complete money(For Example: X Lacs) in my bank account only. Now my brother is planning to buy a home on the name of my mother and brother. Now if I gift money of my part(X/3 Lacs) to my brother then will I have to pay property gain tax on X/3 lacs or that would be exempted because they are buying property.
    Thanks in advance

    1. No , it will not be exempted because YOU ARE NOT BUYING IT .

  66. anoop says:

    Hello
    If any non relative gift me money in cr by neft … What I do in this case

  67. Asheesh says:

    Hi,

    I transfer 15000 pm to my parents as a household expense in native. Can i claim a tax benefit on the same and since there income is less than 2 lacs they will get tax benefit as well. What kind of documentation can I submit ? Also i have filed the returns, is it possible to amend the same now ?

    1. No , you cant claim it like this. Its your personal expense

  68. Online says:

    Hi,I have a question…If I invest 1.5 lacs in senior citizen savings scheme in my parent’s name,can she claim tax benefit of 80c for that??Suppose her total income from other sources are 3 lacs per annum.Please explain.

    1. No , only the person who has invested can claim the tax benefit

      1. Online says:

        Then if I gift 150000 to my mom and she invests that in senior citizen savings scheme,can my mom claim tax benefit under 80c by this investment then???What happens if I invest the same amount in her ppf account??Then can she claim tax benefit under 80c???

        1. Yes, then she will be able to claim the tax benefit because she is investing it from her own account.

          If you invest on her name, even then you or her cant claim tax benefit.

  69. N says:

    Question put by shreematri@yahoo.in
    I give gift out of my salary income (after tax) to my widow senior citizen mother (housewife) every month for last 4 years since I lost my

    father. It is not for an ocassion but out of my love and for her security I gift her. However I do not have a real documentation or notarized

    document.
    I was under the impression this is tax free but now I am worried since the ITO can always tax my mother as credits received form me

    liable to tax.

    Maybe I have mis-interpreted but I am worried since the money gifted by me is out of my income which is already tax and paid via

    netbanking channels.

    I request your inputs to clarify my doubt of if I need to create any documentation retrospectively just for satisfaction of the ITO.
    And how can I really follow the statute that I have made a gift to my mother. Is there any document which I can make now. Please guide.
    Thank you.

    1. No , it will not be taxable for your mother as its a gift from you. Dont worry !

  70. Dear Manish, Thanks for very good information.

    kindly provide your mobile number so that I can contact you.

  71. Nazia says:

    Hi ,

    If my father gifts Rs 5,00,000 to me and then I gift that amount to my father in law to pay off his home loan, will it be taxable in any case.

    1. Yes, because though its not DIRECT transfer, its indirect ! . Its not allowed that way

  72. Dolly says:

    I am a house wife. Can my husband gift 50000/- per month to my retired parents for their livelihood, without any tax implications on him? Can my parents invest the money for interest returns without paying tax?

    1. He can do it in a smart way. What he can do is give 25k to each parent . That way the income would be within the taxable limit

  73. sanjeet kashyap says:

    sir, if i am giving Rs 200000 loan to my wife and she invests this amount in FD and not under TAX slab, housewife, who will pay the tax on interest from FD. ME or My wife.

    1. It does not matter which tax slab she comes, here all the interest will be added to your income and then taxed as per slab

  74. DJ says:

    Hi Manish

    Request you to share, if I get a gift of 1 lakh from my father and invest it in FD, do I have to pay taxes on the the interest accumulated?

    Thanks

    1. Yes, any investments you do from the received money will be taxed.

  75. AlokSrivastava says:

    Good Morning sir !
    1. My mother (widow- Age 75 years) is a family pension holder after the death of my father.
    2. Income from Annual Pension is 2.16 Lakhs
    3.A land was acquired by her during 1995.
    4. She sold the agricultural land in 2014 for Rs. 21.5 Lakhs for which she received the payments in installments.
    5. She received 7.5 Lakhs in 2014-15.
    6. balance amount of Rs.14 Lakhs was received in 2015-16.
    7. She gave me gift of 12.73 Lakhs in the year 2015-16 towards purchase of flat by me. The amount was directly credited to the builders account.
    Now
    8. I understand that I need not pay any taxes being a gift from her
    Q1. Do she need to file income tax for the AY 2015-16 ?
    Q2. If so then in Which ITR ?
    Q2. How could she obtain exemption on tax ?

    – regards

    1. Please ask brief and short questions.

  76. anonymous says:

    how are donations received from foreign nations taxed? i started a gofundme crowdfunding campaign for financing my higher education, the campaign is about to reach its goal, is the money i will receive taxable? does it fall under the sources from other income rule? how do i declare this income? would i be taxed if the amount is less than Rs. 50,000?

    1. Hi anonymous

      This query belongs to CA domain, hence we are not the right people to comment on this issue.

      I suggest you get in touch with a CA for this in your city.

      We also have a CA partner incase you want to explore that, Just fill in your details here and they will give you a complimentary call back

      https://www.jagoinvestor.com/solutions/ca-services

      Manish

  77. Reddy says:

    I am salaried employee from my savings account I have done some fixed deposits in the banks and earned 40 K as a interest on the accounts. Those banks were deducted 10% TDS on the FDS. My company also has deducted tax money according to my slab. Now the questions while filing returns If I include the 40k as “income from other sources” the tax calculation in efiling shows the extra 4K. Do I need to pay the amount or is there any possible to get the exception on it as 10% was already deducted by the banks. Kindly give me the suggestion.

    1. rama says:

      Hi

      You have to add interest income to salaries and calculate the tax on total income . Out of the tax TDS deducted on salaries and interest can be deducted.

    2. You need to pay the taxes, but as 4k is already deducted from banks, then you dont need to because its already paid

  78. stanley says:

    Hi,
    I had purchased a 1 bhk before marriage. Post marriage along with my wife we took a 2 bhk and she is the first owner and i am the 2nd owner. Now she is not working
    I want to gift the 1 bhk rent to her directly.
    Will this rent amt be taxable for me. (90K pa.)
    also she did not invest this further all used to do shopping…. still will this be taxable for me or her.

    1. If the house is in her name, then the rent will be her income !

      1. stanley says:

        1 bhk is in my name
        2 bhk we both are the owners (she is the first owner and I am the 2nd owner)

        1 bhk which is in my name. I want to gift her the rent. Will the tax be borned by me or my wife.

        1. You cant gift the rent like this . It will be treated as your income only. Only on the 2 bhk , rent she can claim under her name as the house is in her name.

          If you want, you can gift the 1 bhk to her and then any rent which will come will be her rent.

  79. aditi says:

    A person wants to tranfer his fixed deposit of 16 lacs to his niece . What is the income tax implication ?

  80. BASANTA says:

    I WA.NT TO GIFT 30 LAKH TO MY SON FOR BUYING A HOUSE HOW TO MAKE THIS PAYMENT WITH OUT INVITING TROUBLES FROM INCOME TAX DEPT. ?

    1. You can make the payment using Bank transfer or cheque ! , but not CASH !

  81. Vubu says:

    HI
    Is there any option to get exempted from giving gift by filing returns.

  82. raj says:

    Hi…really good and detailed article..just have one question : I have transferred/gifted nearly 20 lacs to my mother in this past year…from this article it is clear that she needn’t pay any tax on this…however, what is not clear is : if she should disclose anywhere about this, like in her IT returns ? If yes, then in what section of the IT returns and in which form…my mom is a housewife and her only source of income is interest earned on FDs (less than 2 lacs per year)…

    1. Thats more of a tax return related question. She should check this with a qualified CA !

  83. rahul says:

    is gift deed is mandatory

      1. rahul says:

        Thank for reply…

        is any reference of any section or law.

  84. vkumar says:

    hi manish, just want to know that if i borrow rs 70 lakhs from my friend to buy house plus may be a commercial property, he is not a relative, but a close friend, I intend returning him the money back via monthly installments say rs 30,000/- month from my salary for 20 years…do i have to pay some kind of tax..if yes how much and by when, so that i dont get any notice from IT. Secondly to do this kind of a private deal with my friend do i have to do any formal deal/affidavit or something?

    1. No tax is to be paid on this, as this is a loan amount. Take help of a good CA on this so that you are protected for future.

  85. Manikannu says:

    My friend received Rs 10000 from 120 friends (all are online transaction total 12 lakhs) to conduct college alumni get together program.Does he liable to pay tax.he is going to spend for the get together next month.How he can avoid paying tax since they all not his earned money.Any documentation needed for this

    1. Just ask him to make sure the expenses are also done via banking channel, so that he can show income and expenses both with receipts. No documentation is required though.

  86. Tkg says:

    If my father(pensioner),Mother(Pensioner)& my wife (Working and files IT return every year transfer some amount of money to my account every month to help me early repayment of my House building loan will that be taxable. Documentation required. My wife is also a co applicant in this housing loan but the IT benefit is taken in my file. Anything wrong?

    1. THe IT benefits can be taken by the person on whose name the house is there and who is paying the EMI from their own account, otherwise its wrong !

  87. Abhishek says:

    Hi
    I’m receiving 50k every month in my current account from my sisters saving bank account which I’m using to invest in my business.
    Is this income considered as a gift or do I need to pay any taxes on the same?
    The money is just going as an investment for now and no profit is earned on the same.
    Thanks

    1. I suggest taking help of a CA on this and show this money as LOAN . Incase you want to connect with a CA we trust, you can fill up this form

      https://www.jagoinvestor.com/solutions/ca-services

      Manish

  88. Mayur says:

    Hi manish,

    My wife will be receiving 10 lacs from her dad for buying house. Will it attract tax on it. Does any formal documentation needs to be done for this.

    1. If she is getting cash in her account with cheque or netbanking, then anyways you have proper record for transaction. No other documentation is required. There wont be any tax to be paid by wife in this case.

    2. BASANTA says:

      i want to gift 30 lakh to my son to buy a house How to make the transaction with out inviting troubles from income tax deptt. ?

      1. You can either give this money in cash or through banking channels.

        If you give it in CASH, then your son will have to pay the tax on that, because there wont be any proof that it came from you.

        If you give it through bank, then your son will not face any tax issue, but then have you paid the taxation and accumulated this wealth in white? Because there might an enquiry for you ?

        Manish

  89. Ca says:

    You should not write this it is not allowed as per code of ethics”Thanks to Rishabh Parakh (www.rishabhparakh.com), a chartered accountant who helped me while this post and gave his inputs. He is founder director of Money Plant Consulting (www.moneyplantconsulting.net ) a leading Tax & Investment Advisory service provider in Pune.”

    1. But I am not a CA. How does this ethics apply to me as a blogger?

      Also this is a courtesy message as recognition from my end

      Manish

  90. Ayaz says:

    Need to understand few things :
    One of my friend is asking me to pay his Credit Card bill every 2nd or 3rd Month. And he transfers that amount back to my saving account within days no issues. My only concern is, that he can face issues once or twice with the bank’s website but not everytime I belive. It has become a routine now. Want to understand is there any sort of tax applicable on these type of transactions for me or he is saving some money by evading any taxes. Thanks

    1. AJY says:

      He can just deposit a cheque in the drop box if his online is not working. It could also be that he gets a reminder email / sms just a few days prior to due date, and being lazy he asks you to pay online and then he wires the money to you. My suggestion to you is (1) Every time he asks you to pay his bill, ask him to send you an email , as that becomes documentary evidence that you paid on his request (2) Ask him to pay you back in cash, not cheque or online.

    2. I dont suggest this thing . If there is any tax scrutiny later, it will be hell lot of work for you to explain the tax inspector that the amount deposited in your account was not your income, but the money returned by your friend!

  91. Abhishek says:

    If my father’s brother’s wife (chachi) gift me money than it will be taxable or not?

    1. sunny says:

      no taxable

    2. Yes it will be if its above Rs 50,000

  92. Bhavik says:

    can we gift directly the FD/NSC if yes how please explain.

  93. vimal says:

    if I am getting lottlery of 2 lac rupees. how much tax I should pay on this Gift ???

    1. I will be added to your income and taxed as per slab !

  94. Abhimanyu says:

    what if i am earning 10 000 per week in an business. How much tax should i pay

    1. That amounts to 5.2 lacs a year, if you have any other income , add that to this, and then pay income tax on the whole amount as per the tax slab !

  95. Rupak says:

    My wife has received Rs.500000/- from my father. Now She wants to gift her mother in low Rs. 400000/- on her birth day. What will be the tax liability.

  96. Sunil says:

    Hi,

    When I was NRI (also my wife), I gifted some money to my wife and she invested that amount to bank FD. Please let me know, as now we both returned to India and my wife is house wife only will the interest from my wife’s FD will be clubbed to my income or not?

    1. Hi Sunil

      I dont think so , because when you transferred money to you wife, you were not in India , hence the indian tax rules should not apply to you . This is my guess. Not very sure, please check with a CA on this to be sure about this.

      Manish

  97. kiran says:

    I am from poor family have rhree young sister mother is old and father going fpr treatmenttreatment we from mumbai

  98. Jasmeet Singh says:

    Hi , My father died before 12 years and had given cash of 11 Lac to me, however I have deposited that cash before 3 years in the Bank (saving account). However now Income Tax notice has came to me now to give reason for depositing this much money in saving account and to give proof however the money which my father had given was hard core cash and I do not have proof . What will be the treatment of this ?

  99. Nick says:

    Hi, Very helpful article. just wondering if my mum (Indian)gifts my wife (NRI) some money, would she have to pay tax on that. Again the amount could be more than 50 lacs.

    1. No , she wont have to pay any tax in India, but what happens in the country you are residing you will have to check that

  100. KAMINI TIWARI says:

    HOW CAN I GIVE TAX FREE GIFT TO MY BLOOD RELATIVES

    1. You just transfer it to them. They wont have to pay tax on that.

  101. Ada says:

    Hey…nice article. Quick question. How about if I am a NRI and want to send some money to my parents to buy a house?
    Will they have to worry about taxation on the received funds?
    The amount could be more than 50lacs. Thanks

    1. No , they wont have to worry on that !

  102. rajesh says:

    i bought gold of 90000 /-rupees from my friend how shoukd i regularise it

    1. Hi rajesh

      I am not clear on what is your question. Please repeat it with more clarity

      Manish

  103. Swati says:

    Hello, my father sold his house last week and is going to buy another one next week. So exempted from capital gain tax. Now he wants to gift it to me. Is there any tax he has to pay for that?
    If he buys the new house giving my name only, then does he have to pay capital gain tax?

    1. No , I think still there wont be any tax angle. Better talk to a CA once on this !

  104. Venkat says:

    Hi Manish,

    It is very good article. thanks. my doubt if any person is getting 5000 or 2000 smaller kind of amounts in a year from relatives and in total 1 to 2 lac. All are smaller amounts only.
    1. Do we have to track this all those things?
    2. if Income tax checks, will they agree we got gifts of smaller amounts and in total 1 lac every year without showing any documentation.

    Thanks,
    Venkat

    1. Yes you need to track all this and keep in mind while paying tax

  105. Gaurav says:

    Hi

    Query 1. How many times in a financial year can i gift?

    For example: Can i gift my mother x amount per month and get an recurring deposit in her name.
    Query 2. Interest earned on the above mentioned recurring deposit will not be clubbed with my income.
    This interest earned will be income of my mother?

    1. 1. You can gift any number of times

      2. Yes, thats correct !

  106. Jayakumar says:

    My mother have a property and she is about to sell the same. She plan to give share to 3 of her children and keep something for her. She would like to know how to give this to her children without getting taxed or very less taxed. Each children might invest in properties. The current property is in her name and she didn’t want to write a will document mentioning share to her children, as it complicates the sale of the property. Property is in chennai.
    Your suggessions required.

    1. Better to talk to a good lawyer on this

  107. HRA says:

    My sibling and I are receiving shares from a relative that were part of our inheritance that we were able to obtain after a settlement (the relatives had forged wills, etc. and hidden our assets). We are finally getting the shares. Is there inheritance tax on it? What if my relative insists that it be given as a gift? Is it taxable then?

    1. There wont be any inheritance tax

    2. Hra says:

      Thank you manish. How do I prove inheritance?

      1. Any legal document should be enough !

  108. Manoj says:

    Hi, I have couple of questions regarding reinvestment and gift tax.

    My mother sold a property for 39 lacs in May’15. The cheque was deposited in her savings account.

    How much time do we have to reinvest this amount?
    In case it has to be deposited in Capital gain account then what is the last date, is it 31st Mar or 31st Jul?
    Can she gift/give this money to me so that I can repay my existing home loan of 27 lacs? What are the tax implications?

    Thanks in advance.

    1. She has time till next 2 yrs , but if she is not using that money in this financial year, then it has to be moved to capital gains account !

      1. Manoj says:

        Thanks for your reply. What is the last date for moving this to capital gains account. Is it 31st Mar to 31st Jul i.e. last date of filing the return.

        You are requested to answer my third question as well.

  109. Sridhar says:

    Sir. I have purchased a house (Apartments type) in 2008 September for 15 lakhs and sold the property in 2013 May for 27 lakhs. But in the sale deed it has been shown only 15 lacs. and i have received balance amount by DD to my savings account. Also please note that the house was jointly purchased by me and my spouse. I have made FD deposit for the balance 19 lacs as joint account in my name and my wife name. But i have not shown the property sale in the Income tax return. Will i Get any notice from IT ? please reply

    1. If you have not paid the full tax which IT department deserves, then surely there is a potential for getting a notice !

      1. Sridhar says:

        Thanks you sir for your kind reply. Can i show my property sold details in the current year IT submission ? for the year 2013 or can i wait for the Notice from IT and act accordingly

        1. Hi Sridhar, I suggest taking a CA help on this ..

  110. Anil says:

    Hi Manish,

    What a wonderful article. I am feeling worried for not seeing your article from all these years. They way you presented is awesome.

    I have a query. I am earning yearly 11 lakhs. After our weeding my father-in-law gave a land property and i asked him to sold it and give money to me. He done it 2 years back and deposited my in parts to my account. Some one money he deposited in my wifes account[Joint account of my wife and father-in-laws]. We withdraws that money from ATMs. Some he deposited in his son account and he transferred the same to me. All this Money is marriage gift fro me and my wife.

    1. Out of all these money. I made 2 FDs on my 2 Accounts. Lets say 1L in each account. Will the interest earned is taxable for me?

    2. These FDs are going to close by MAY. Can I give this money to my wife and ask her to do FD for next year. Will interest earn are taxable? As this is a gift for both I want FDs on her name.

    3. This April he is going to give another 2L. I asked him to deposit in my wifes account only directly. SO that now my have 4L FDs . Will all this are tab free? As she is not earning any money.

    1. 1. Once you have got the money, that time it was not taxable, but in future when you earn the interest on it , it will be taxable in your hands only

      2. Still the FD interest will be taxable

      3. If the interest income is not upto the taxable limit, then it would be tax free. So I think its better you do FD in your spouse name itself

      1. Anil says:

        Thanks for the quick replay.

        Fot point 2: So If I show interest earned in next year IT returns that is enough right. Thanks.

        If I gift same money after FD completes to my mom and I do FD on her name means no tax right? Buy my father is still working as a govt employee. Is that fine?

          1. Anil says:

            Thanks for your time.

  111. Raghavan says:

    Hi Manish,
    I transfer 1.5L to my mother and opened a PPF acct on her name in Oct-2015. Below are are my questions:

    a. From the above note, she doesn;t need to add that 1.5L as her income ? correct ?
    b. Can she get tax benefit under section 80C, even though amt is transferred from me ?

    Cheers,
    Raghavan

      1. Raghavan says:

        Thanks a lot Manish, for your quick response.

        One more question: as PPF has no tax on withdrawal, my mother need not pay any tax when withdraw after 15 yrs (even though source of PPF deposit is from me every year), right ?

        Cheers,
        Raghavan

        1. Yes, you are correct Raghavan

          1. Raghavan says:

            Thanks a lot Manish, great help..

  112. PANKIL says:

    CAN SON GIFT TO HIS FATHER ANY SUM OF AMOUNT.?

      1. Nishant says:

        Hi Manish,

        Continuing to this, I am paying 15k to my father every month who is a sr citizen now. in what scenarios can I get tax benefit on this? Can i declare this money as a gift given to my father and get tax exemption? Please advise.

        1. Giver can never get any tax benefit !

  113. krishnan says:

    Dear Manish,

    I transferred more than 10L to my son for his college expenses etc recently. Does he need to file tax return and mention the non taxable gifted amount. If he fail to do that will he get scrutiny from IT dept. I am salaried person, part of the money is transferred from my account and part from my wife’s account (she is not working). I keep transferring some money to her account sometimes.

  114. Ravi says:

    Sir,
    If one of my friend send me a gift from abroad worth Rupees two Lac than how much tax I have to pay in what rate.

    1. It will be added to your income and as per slab you will pay the tax

  115. Shankar says:

    Sir, I had inherieted a land which has been acquired by govt. and I am being paid the compensation amount with TDS. Is this amount taxable as I had inherited the land ? Please reply.S

    1. Not because you have inherited, but because now the money is paid to you. Yes its taxable

  116. kumar says:

    dear sir,sorry to disturb u.my friend expired leaving 11 lakhs in fdr in bank ,my name is mentioned as nominee
    I do not want to keep the amount and hence have called his wife from abroad to claim,she insists me to claim and hand over the amount to her,pl guide me the procedure ,i am a pensioner of 70 year old and do not file even the returns m,

    1. There should not be any issue even if you claim it. You can claim and take the money and later transfer it to wife!

  117. Purba says:

    Hi – thanks for this helpful article. I want to know whether it is necessary to make the repayment in the same assessment year. For eg: I took an amount of Rs1,00,000 from my friend for doing some interior in November 2015. Is it mandatory that I pay him back by this assessment year i.e. by 31 March 2016 to not consider it as a gift? Or is it fine if I pay it in the nest assessment year as well? If I repay him after 31 March 2016, should it be considered as gift and should I need to pay tax on that? Please confirm.

    1. No its not like that. YOu can make the payment later also in next financial year !

  118. Johnson says:

    Hi Sir,
    I have won 2 gifts in a contest held by a bank. One is a Car(Costs around 3.6 Lacs) and the other one is an LED TV (Costs around 30K).
    They advised me to pay tax for both the gifts. Should I pay tax for LED TV as the cost is less than 50K. Please advice me on this.

    1. What matters is the total gift amount in a year, not individual price !

  119. Nalin says:

    If my uncle’s sons ( father’s brothers ) , including me gift or tranfer ancestor immovable property in the name of my daughter , what will be tax implications for my daughter.
    Please suggest
    Thanks..

      1. Nalin says:

        Thanks Manish, but other than me are not lineal descendants ? Request you to clarify.

        1. IN that case you are the only legal heir !

          1. Nalin says:

            Thanks Manish

  120. HARISH says:

    Sir,
    I sold my Agriculture Land for Rs.12,40,000/- and gifted the same amount to my mother on her 60th birthday.
    She invested the same in purchase of agriculture land.
    In the above case as iam gifting the amount will i be Exempted under section 54B

    1. Hi HARISH

      A CA is more qualified to answer you query, hence I suggest better get in touch one.

      We are not right people to talk on this

      Manish

  121. RACH says:

    a friend of mine wants to gift me home value around 70,000.
    is it then taxable to me..???

  122. Shweta says:

    Hi,
    I want to save tax, say 50000, will i be able to save it by gifting to a relative . If i gift 50K , will i save tax on full 50K or some percent.

    1. No you cant. The giver can never save tax !

  123. Sundari says:

    Dear Shri. Manish Chauhan,
    My brother is transferring a plot with stamp value of Rs.18 Lakh to me (his own sister) as Gift. The plot will be registered now in my name. Will i have to show this in my IT return or pay any tax for this? For gifting, will my brother have to pay any Tax?
    Regards,
    Sundari

    1. No one has to pay any tax here !

  124. Adarsh says:

    HI Manish
    first of all let me congratulate you on the wonderful effort put forth and the great helping hand you are proving to be for people like us!
    I have a simple enough question: – Both me and my wife are NRIs based in London. If I were to gift a flat (currently purely in my name; with my wife as the registered nominee); to my wife – with no money being exchanged whatsoever; I wouldnt presume it would lead to either of us being taxed in any way. – is that assumption correct?
    regards
    Adarsh

    1. Yes, from what I understand, it wont .. But I strongly feel you should connect with a good CA on this matter and take thier advice

  125. sunilpatnaik says:

    Sir, Kindly give reply to my two Queries :
    1st : Can my married sister gift a land purchased value about 7 lakh to my wife ? Is it comes under Gift rule in India ?
    2nd : After my sister’s marriage, I have given many times money as Gift. Now, Can my sister gift a land to my wife ? Is it allowed under Gift law ?
    Thanq in anticipation. sunil

    1. Yes, she can gift it, its a close relation and will be alllowed

  126. Mrinmoy says:

    hi manish,

    a foreign friend of mine wants to buy me a 5-10cr house in mumbai, he is not my relative and not a person of indian origin. how can we buy the house? and if he wants to transfer money to me, how can he transfer 5crs to me.
    what is the procedure and what tax will be applicable if any !
    please respond asap !

    1. Hi Mrinmoy

      A CA is more qualified to answer you query, hence I suggest better get in touch one.

      We are not right people to talk on this

      Manish

  127. Sanjay says:

    Hi Manish,

    Please clarify me on tax implication on the below scenario,

    If my friend in foreign country do some business, gets some profit and pay tax in that country and if he sends that money back to my Indian account as gift and I will pay gift tax in India.

    Is everything will be ok if I pay tax completely for the gift amount received?

  128. UMESH says:

    DEAR SIR, I WANT TO PURCHASE HOUSE AND FOR THAT MY BROTHER IN LAW CAN GIVE ME GIFT OF SOME AMOUNT IN CHEQUE? AND THAT AMOUNT IS TAXABLE?

  129. Rakshit says:

    Gift received less then Rs. 50000., this is showing is income tax return or not & if showing then under which head

  130. Arun says:

    My real Mausi (Mother’s sister) wants to gift some money to my wife, will it be taxable ?
    I do understand from blog conversation that if my wife invests that money, then she has to pay tax on gains.
    Thanks a lot

    1. No , I think there wont be any tax

  131. Shahid says:

    Hi,
    My mother wants to transfer some amount to my sister for her daughter’s (grand daughter) marriage as a gift. How can it be done? What are the requirements? She will probably gift it through a cheque to my sister.

    1. Yes, cheque payment is fine ! .. There wont be any issues !

  132. Nitesh says:

    How to show amount of Rs 45,000/- in my income tax return, which I gave to my parents as a gift on their marriage anniversary? Should I need to create some kind of document for this and attached as a proof with ITR to get tax benefit? Up to which limit I can avail the tax benefit by gifting money to my parents?

    1. Nitesh

      You cant avail any benefit by “giving” gift.

  133. Gopal says:

    Hi,
    If one sister(A) gives a gift to other sister(B), cheque exceeding Rs 1,000,000. then as per income tax rule, sister B will not have to pay tax. however is there is any rule or liability for sister A who is gifting that amount from her existing fixed deposits ?
    Dose sister A has to pay any tax for the gifted amount, other than interest received on that FD for the particular financial year?

    1. Gopal

      Any tax given is out of the post tax income. So giver never gets any benefit

  134. hanish says:

    Dear Mr Manish
    If I recieved gift Rs 200000-300000 in 2015-2016 by cheque from my father in law and Is it taxable
    Or if I invest this amount in fd its interst taxable to me ?

    1. No , it wont be taxable for you

  135. Sahil says:

    Hello Manish,

    Can I gift cash to my Brother in Law (wife’s brother) for buying a house or it is better that I gift it to my wife and then give it to her brother. Appreciate your valuable advise.

    Sahil

    1. Yea, its better to give it to your wife and let her pass on to her brother.

    2. Sahil says:

      Thanks, how about if I gift it thru joint account with my wife via net banking. It should still be tax free for my wife’s brother ? Is my understanding correct

  136. Rajesh says:

    I have a gift deed registered in my name, by my father in October 2015.
    Should I submit it at time of investment proof declaration for income tax for the year 2015- 2016. Or should have to submit it anywhere?

    1. You dont need to submit any document while filing returns. Just keep it for your own records !

  137. ARUP DASTIDAR says:

    Dear Mr. Manish , must say you are doing excellent contribution to the society. amazed by your patience to answer everyone with details. I have two concern to share with you and take your suggestion
    1. I am transferring (thru netbanking ) every month 50 K to my wife for her expenses which includes household monthly expenses, She is saving from that and doing recurring pf 25K . being home maker she does not have other income. she gave 15G at bank. Can she legally do this?

    2. can I also gift her 3- 4 lacs ( in form of netbanking – 1 lac per transaction ) may be 3-4 times in a year . Then she does FD of that amount. The money that I transferred ( thru netbanking ) , that was already taxed on me so I suppose I shall not be taxed again. Pl correct me if I am wrong. what happened if she does FD on those amount and interest is not taxed because 15G is submitted. is it lagal.

    Thanks in advance.

    1. 1. Yes she can do that. However that money is actually coming from you. So tax liability is on you if any income is there

      2. The income from FD Is taxable . Form 15G only helps you to not get TDS deducted. Thats all . It means dont deduct any taxes right away from the income, I will deposit it later.

      1. ARUP says:

        Thanks Mr. Manish. My wife also do private coaching at home , remuneration which she get is mostly cash and we spend that for different monthly expenses and in tern I transfer from my account . Still her income from FD’s will be taxable on my head ?

        1. NO , if its her income, then only she is liable to pay tax on it !

  138. Amit says:

    I have paid a big amount to my father and he has invested in RD with bank. Shall its income be taxable in my hands or with my father?

    1. It will be taxable to your father . Not for you

  139. Shubhajoy says:

    If my father gifts me Rs. 5 lacs for purchase of a car, will it be taxable from my end?

  140. Gk says:

    Hi
    In whose a/c rental income of the property be calculated if the property is gifted (by paying the required stamp duty) to son by parents or vice versa

    1. Once its gifted, then it becomes son property.

  141. Madhu says:

    I gifted some money to my wife and she put that in a FD. In my ITR I have to show the interest in Income from other sources. Is there any need for my wife to declare this money ?. Under which exemption head she has to do this in case it is needed

    1. No, she does not have to do that

  142. Pavan Reddy says:

    Dear Manish Sir,
    My father has gifted me a car worth Rs.7 laks on the occasion of my marriage.
    The purchase was made on the basis of EMIs and he is paying the EMI amount
    Through his bank account. The car is registered in my name.

    My query is whether the gift document be made on a simple plain paper or does it need
    be done on a stamp paper with notary.
    Pls help me in this regard. Thank u.

    1. If the payments are done online and you have that on records (bank statement) then you dont need to do all those documentations

  143. Dineshkumar says:

    Dear Manish,
    My grand parents inherited old family jewels. Which we converted the jewels to cash. Now they want gift me the amount. How can enter it in my book of accounts .. I am having an proprietary concern..thanks in advance.

    1. Hi Dineshkumar

      A CA is more qualified to answer you query, hence I suggest better get in touch one.

      We are not right people to talk on this

      Manish

  144. Balaramdas says:

    My wife brother and sister wants to give 5.0 Laks each to her, she is only house wife only. whether this amount will attract any income tax ? is so how much I have to pay the tax> please anguide me.

    1. NO, she wont have to pay any tax on that money on recieving .

  145. satvinder says:

    Sir, I am NRI my whom is living in india received a letter of IT office which details are FY 2012-13 Information Code – CIB-410 Information Description _ Deposit in cash affregating Rs 2,00,000/- or more with a banking company and FY 2012-13 TDS-194A and asked my wife to file income tax return for 2013-14. she never filed income tax return before as she doesnot work she is hiusewife and had Fixed deposites in different banks about 35 lacs which I have given her from time to time, for last 18 years of our marriage I need your help what to do further

    1. Hi satvinder

      A CA is more qualified to answer you query, hence I suggest better get in touch one.

      We are not right people to talk on this

      Manish

  146. Virendra says:

    Dear Sir,

    I have 17 year old daughter. My father in law wants to give her some amount (Rs 5.00 lac) for her higher education. His source of income is pension. I would like to know if he can give her this amount and do we have to pay income tax on this amount. Please clarify. If possible please reply in my email address.

    thansks with regds,

    Virendra

    1. No you dont have to pay any income tax on the amount received. Its a valid gift channel ..

  147. Romy Singh says:

    I want to give a cheque of 1.25 cr to my real brother can I give him, will my brother would be taxed on this amount further he wants to invest this money in for or some property, then this 1.25 cr would be taxed or the interest or capital gain would be taxed. Thanks for reply in advance

    1. It will not be taxed to him on recieving the money. ONce he used that money, and makes any gains, taxation will come at that point of time

      Manish

  148. Yogesh says:

    Hi Manish,

    I’m buying a property in Pune in which my father is helping me with 10 lacs. Do I need to pay gift tax, If yes then could you please help me with the process and also could you please let me know how to save tax on this.

    Thanks,
    Yogesh

  149. Snehdeep says:

    My father wants to invest 15L+ amount on my kids name (age 6months) in PPF, NSC & Mutual Funds.
    Can you briefly explain the process and taxation view.
    Would it be taxable if he invests on my name?
    Thanks.

    1. There wont be any taxation angle here .. because your father is allowed to invest in your kids name .. its like a gift

  150. neel says:

    Hi Manish – if my wife gifts a car (value > 50k) to my father, will it be taxable for him?

    thanks and appreciate the help!

      1. neel says:

        thank you much Manish!

  151. gurubachansingh says:

    My son went for studies in US and after completting the studies started working as internship and now he wants to send some money to India. 1. what is the source of sending the money. 2. whether the money will be taxable in India on receipt. 3. whether he gives as gift to parents then what documents required

    1. No it wont be taxable in your hands and no documentation is to be done

  152. Ravinder says:

    What will be tax implication on gift in case both husband and wife are employed and they give money to each other. Pl. also clarify whether there will be clubbing of income of the two,

    1. THe person having higher tax bracket should pay the tax

  153. Ravinder says:

    i) In case of working spouse, if I gift him/her money by account transfer to buy tax free bonds, will it be taxable to any of the two. Moreover, the interest income on bonds is tax free being the tax free bonds.

    2) Your attention is drawn to point no. 2 under head Important. Pl. clarify, will there be tax implication of clubbing of income in case both husband and wife are employed.

    1. 1. It would be taxable for the person who gave the gift

  154. TraptiBatra says:

    I purchased a car costing Rs.4 lacs in Nov 2012 in my name. Now the present value of car is Rs. 3lacs. I want to gift the same to my father and transfer its title in my father’s name. Please advise whether there will be any tax liability in the hands of my father

    Thank you

    1. Hi TraptiBatra

      A CA is more qualified to answer you query, hence I suggest better get in touch one.

      We are not right people to talk on this

      Manish

  155. Hi
    I want to donate one my plot(land) to my brother.
    1)When I donate the land what is the land value I need to add in the stamp paper while registration? Do I need to show the market value of the land?
    2)After I made the donation if he sells it for X amount who will pay the tax for the profit he made?
    3)Will that profit he makes be considered for income tax clubing to my account?
    Please advise. Thank you

    1. Hi Manimaran

      Your cases is a bit complex and I think we are not the right people to comment on it.

      My suggestion would be hire someone who is professional in this area and consult them

      Manish

  156. Dear Manish,

    My father has expired one year back and has left one house in Indore to my younger brother and myself. My brother wants to retail the house and I have decide to relenquish my right on the house for a consideration of Rs 40.0 lakhs.

    To save taxes, can my brother gift 30 lakhs to me or my daughter without attracting any taxes. (rs 10 L in cash)
    Is there any other way to save taxes ?

    Kindly reply urgently,

    regards,

    Hemant Mishrra

    1. Yes, gifting can be done and it will not be considered as SALE , But when you guys sell, at that time the income tax will come into picture !

      I suggest consulting a good property lawyer on this point

      Manish

  157. vijay says:

    Dear Manish,

    Please help me with this.

    We 4 bachelors share a flat and my credit card. All of our room mates transfer money to my bank account to handle rent and credit card bill. My income is around 10Lakhs and the amount my rooms has transferred is around 4Lakhs. I have no proofs other than excel sheets of monthly expenses.
    Are those excel sheets good enough to show that the extra 4Lakhs is not my income?
    What extra do i need document?

    Thanks!
    Vijay.

    1. You should stop this immediately 🙂

      Better take cash from them and use it for your expenses. While till now whatever you have done should not create much issue. You can explain this to tax inspector , but I suggest you stop doing it from now onwards !

  158. Mathew says:

    is it necessary to include the gift received from Son(say) in Father’s Income Tax Return as ‘ Other Non Taxable Income’

    1. YOu dont need to mention is as income at all

  159. My wife wanted to gift rs.10,00000 to my son as a gift in the form of Fixed Deposit.There is any tax relief.

    1. a says:

      Tax will be there on the Interest received from the FD.

  160. rajneesh says:

    if i want to gift to my FIL for some stuff… is there a tax on this? this will be over 50K Rs

    1. A says:

      No tax on the same. But you have to pay tax if any interest received from the amount transferred by you.

  161. Ss says:

    Dear Manish,
    If an uncle, a resident of India, is the beneficiary of a family trust fund set up by his brothers son, ie his nephew, in the U.S., what are the tax implications here for him, the beneficiary? I believe nephew to uncle does not constitute being a relative?

    1. Hi Ss

      Your cases is a bit complex and I think we are not the right people to comment on it.

      My suggestion would be hire someone who is professional in this area and consult them

      Manish

  162. Shiv says:

    Nice Article Manish!!

    I have one quick question. Currently I am in US and have one property in India which i am not able to manage any more so was planning to gift it to my brother. I am not drawing any India salary and current property is on rent so filing rental income as the only income source which turns out to be zero tax filing. When I gift it to my brother will there be any tax consequences to me or my brother. My brother is employed in India and files income tax returns regularly. And do I need to do any documentation for this gift to my brother.

    1. Yes, you will have to do the documentation , but a CA will be able to help you in detial

  163. Bulusu Subrahmanyam says:

    I want to gift Rs6,00,000/- to my son for purchase of a flat. Whether I have to pay income tax or gift tax on it. I am a retired person drawing pension of Rs26000/- per month. I am showing the interest received on the deposits in my income. Please clarify.

    1. No , you dont have to pay any tax on it . You can safely go ahead and gift it

  164. Priya says:

    My mother sends me money for household expenses.. will that be taxable??

  165. Rohit says:

    Father can gift amount more than 50000/- to his son’s HUF account for birthday and anniversary of karta and members of HUF ? What is tax liabilities ?
    Thanks

  166. Rajiv says:

    Manish,

    This is an excellent article.
    Please help on this one.
    My wife’s Maushi expired and she had a FD where she had my wife’s name as a nominee. Now when my wife gets this money, does she has to pay tax on this amount received ?
    My wife is employed and comes under 30% tax slab.

    Thanks in advance for your time,
    Rajiv.

    1. Yes, she will have to pay tax on it !

  167. Ram says:

    Dear Manish,
    I have 2 questions
    1. If one has received gifts which are below the taxable limit of 50,000/- OR tax free eligible gifts (like from lineal relations), do we need to include them while filing our Annual Income Tax returns or just recording them in our Capital Account statements is just fine.
    2. If I have gifted certains sums of money on certain dates to my brother/mother/father WITHOUT NEFT or cheque etc. but in Cash, and we have recorded the entries in our respective capital account statements, is this ok? Or would those transactions have necessarily been done using Cheque/DD/NEFT/RTGS etc.?

    1. 1. Just maintaining records is fine

      2. Just that, if you have done it via cash, its become a bit tough to prove !

      1. Ram Narasinham says:

        Thank You so much for responding back, Manishji.

  168. RahulPrakash says:

    Hi Manish ji,
    I am planning to buy a house.My father is a retired government servant. He is contributing around 25Lacks for the actual amount of 46L. Will it be taxable to me.

    with regards

    1. No , it wont be taxable for you !

  169. Ram says:

    My Uncle is going to settle around 80 lakh INR to my Mom for complete ownership of all the ancestral properties. He is planning to give 40 Lakhs (as settling amount towards forgiving the property) by DD and he is planning to give us the remaining amount as gift. PLease let me know if mom will have to pay any tax towards this amount . She is a home maker and hence I guess that the interest gained from the FD of this amount also won’t be taxable if it is below 5 lakhs. Please clarify.

    1. Yes Ram

      The 40 lacs wont be taxable, and interest income on it will not be taxable upto 2.5 lacs (income tax exemption limit)

  170. Manoj says:

    Hi Manish,

    I gave my friend 2,00,000 rupees through net banking and he promised me give in few months. Is this amount taxable to me when he returns the money. Also if he gives the money back next yea,r will this cause any tax issues?

    Thanks,
    Manoj

    1. No , if it can be clearly established that its a give and take transaction .

  171. arif says:

    Dear manish sir
    Can I take 5 to 10 lac as loam from my friend through cash or bank transfer with proper documentation. Will it be tax free

  172. Rajat says:

    I am earning and my father also has taxable income and mother is housewife with no source of income.

    Now suppose if i give some money to my mother and she makes FD from that money, then will the interest income from that FD be clubbed with my father income while computing tax or that income will be tax free. Please guide me

    1. Hi Rajat

      No , if you give money to your mother, it will then be her money and all tax will be her’s . Your father has nothing to do in this .

      Manish

      1. Rajat says:

        Thanks Manish

  173. binu says:

    If my wife receives some amount of money and gold from her father and if the transaction is documented and signed by me and my wife will it be any kind of issue for me as i am a government employee paying tax already

    1. No Binu

      There wont be any issues !

  174. shashank says:

    Respected Manish ji any amount given by son by cheque by net banking to father as a gift is taxable ? Is it to be shown in IT returns? if yes how it is to shown in IT returns of father?. Please clarify. Thanking you in anticipation.

  175. manoj says:

    Respected Manish ji can my wifes grandfather gift 1500000 to my daughter

  176. Sharad says:

    Suppose I am receive Rs 10 lacs from my son and I Make a FD for the same and earn interest. However, my total income including that from this FD is below the taxable limit . Are there any tax implications for my son , particularly on interest earned on FD from his money.

    1. No , your son has no tax implications anyways !

  177. rohan says:

    Dear Sir,
    If mother Gifts Says Rs 12 Lacs to his son via cheque and also make a deed on plain paper stating reason as love and affection , amount gifted, date, cheque no and signatures of donor and recipient but not registered and neither paid stamp duty. After few months she expires, can that Deed on plain paper can act as legal evidence to make it non revocable if prosecuted by other Class 1 legal heirs ?

    Regds

    1. No , once its paid by cheque . It should not be challanged !

  178. hit.singh says:

    Dear Manish,

    My dad who also file his ITR every year transfered arnd 2.2lac in 4 installments to my account via cheque and direct deposit. He just transferred saying keep it and use when needed.

    I am under 30% tax slab and want to understand tax points related to this.

    Rgds
    Hitender

    1. No tax angle for you on this money as of now .. Because any gift from parents to kids or vice versa is not taxable !

  179. Puneet says:

    Dear Brother,
    Please tell me. My wife sends around 8000 INR every month to her mother who need financial aid to sustain.
    Can she show this expense to save tax? If yes, please tell me how.

    Many thanks!

  180. Ashwani says:

    Nice Article…

    Kindly help me[25 year age]…

    Each month I transfer(NEFT) 18k to my widow Mother(housewife [age < 60]) as monthly expense for her, my wife and my younger siblings.
    I'm leaving in other state than my family…

    Is there any way or trick to get tax exemption for me on this…

    Because it is very hard to live in this situation…. if not how could I can address this type of scenario to government.

    1. No there is no way out of this to save tax. Because you first pay tax, get the money and then transfer the money to mother

      1. Ashwani says:

        ohhh…
        Thanks for the reply…
        India mai hona hi nhi chahiyae

        1. Thanks for your comment Ashwani

  181. Jitendra says:

    If I wish to gift Rs. 1.5L to my father in-law, is there any taxation involved?

  182. Yogesh says:

    Hi,

    I have a question regarding transfer of property from my sister to my name. We own one flat where my sister will transfer her flat on my name as she is investing in other property. But the issue is I and my sister have diffrent surnames on all our documents. so can we make one affidavit regading our relation so that we can get benifit of not giving stamp duty once again beacause as per current governmnt rule, for property transfer between family members we dont need to pay stamp duty.

    Can you please help me with this scenario.

    Regards,
    Yogesh

  183. bkmurthy says:

    I forgot to mention that my son is the primary account holder in the joint account.

  184. bkmurthy says:

    I am in the 30% tax bracket. My son aged 22 has no income. I have a joint account with him. If I transfer an amount from my account to the joint account online and then put it in an FD and the interest on the FD is not going to exceed 1.8 lakhs (is that the limit?) then will there be any tax to be paid on the amount transferred and/or interest earned either by me or my son?

    Thank you.

  185. Paresh says:

    Hellos,

    I have an NRE account.
    Please let me know how much amount can i transfer to my Uncles (Dads brother) account as loan.
    Will i be liable to pay any tax if i do so.

    Regards,
    Paresh.

    1. You dont have to pay any tax for that in India

  186. Robin says:

    Hi,

    I have an annual income of 9 lakhs.If i gift my wife 50 thousand and she invest that amount in ELSS in her name .Can i get tax exception for that 5o thousand .
    I mean is there a provision to claim tax exemption for an amount which is less than 50 thousand , i have gifted to my wife of children

    Thanks
    Robin

    1. No you cant get any tax exemption for gifting it !

  187. Murli says:

    Hello,
    Suppose brother gifts sister a sum of Rs. 10 lacs and that sister gifts her husband the entire amount. And that amount is gifted to the sister of husband. Is it taxable in hands of any recipient?

    1. Yes, you have just used a chain of people here . Ultimately the money went from A->B , and the rules will apply whatever the rules are !

  188. Koparkar anand says:

    Retired person age 72 years. Planning to buy a flat. No funds from my side. The money will be given by my son in law who is NRI. How the money translation will be looked at from tax point and what precautions one should take here.

    1. I think you dont have to worry on the tax part here. Its allowed between the relations you are talking about. However as its a big amount, I think taking advisory from a CA would definitely help

      Manish

  189. Dilip Khosla says:

    Dear Manish
    Am not very conversant with tax laws but like to pay my taxes correctly.
    Ques 1 Our son got married in February this year and friends and relatives gave various amounts of Shhagan. Total amount would not be more than 2-3 lac Rs.
    Our son is an australian citizen and has an NRO/NRI account in India which I operate as, Mandate,. Should I deposit the money in my account and pay tax on interest generated? Any other suggestion? like i said, am happy to pay tax on interest generated but would like to avoid tax on the entire amount. After all it is wedding gifts.

    Ques 2. My wife receives money through paypal from software consulting work done by our son mainly in the USA. Can this be taken as a gift from the son to his mother?

    Thanks

    Dilip

    1. 1. The only problem now is HOW DO YOU PROVE THAT ITS WEDDING GIFT? You can always bring any cash and say its a wedding gift. So now I think the best thing is to use the cash for your expenses and not deposit it, otherwise have a plan to prove that its wedding gift.

      2. Yes, it can be .. She can get any amount of money from Son as gift. No tax to her !

      Manish

      1. Dilip Khosla says:

        Dear Manish
        Thanks loads.
        But I do have a list of all the friends and relatives who gave shhagan. In fact I want to deposit in my account and transfer to our son in AUD since it reghtfully belongs to the newly weds.

        Question two. While our son can gift to his mother and me from earnings made through projects done for US clients it seems illogical that in such a case no one pays tax for the earning. The US client pays the mother directly through PayPal so even our son has not paid tax. Seems correct that someone must pay tax.
        Kindly enlighten further.
        Regards
        Dilip

        1. Dilip

          If you can prove that it was a gift on the occasion of marriage, then you can deposit it in teh account with any taxation .

          Also if your wife is getting the money in her account, then its her income and she should be paying the tax

          Manish

          1. Dilip says:

            Thanks Manish. Now it’s all clear. My wife pays the tax and the shhagan money can be explained. We have records. You have been very helpful. Grateful.
            Ohho. Just one more question springs to mind. We are going to Australia to visit the kids. What if I exchange the shhagan cash for Aust dollars and give our son the money. Any problems??
            Tks again. Regards

  190. parag says:

    Hi I want to know if I have taken a gift amount 1 lac from my mama ( mom’s brother ) and I want to document it on 20 rs stamp paper . What time and date of the stamp paper should be .
    Gift taken in may 2014 . Then stamp paper should be of what date ?

    1. Hi parag

      The question asked by you is beyond our scope. Its suggested that you hire an expert on the issue and pay them for the advice.

      Manish

  191. Vaibhav Jain says:

    Hi Manish,
    Thanks for you effort for clearing so many queries for different issues.
    Well I have one query as well, hope you can help in to understand…

    I booked a flat in name of my Brother and me in 2011 and now same is ready for registry. My father paid a handsome amount over the period of time from his bank to fulfill the builder payments.

    My query is, after the registry done for that flat under mine and brother’s name, do we need to show amount paid by my father in your ITR? Or same can be considered as gift from Father to Son to buy property.

    1. It can be shown as gift .. no issues for you !

  192. Reyad says:

    My brother in-law gave me 4 lac in cash as wedding gift after 3 month of wedding to buy a car. I deposite that money in my bank account as cash in hand. Do i need to pay tax for this money? Do i need to declare it in income tax return?
    Please advise.

    1. I suggest not to deposit the money in account, because how will you prove that the money was given to you as gift ?

      1. Yusuf says:

        I already deposited that money. Now is there anything i can do?

  193. jagia pc says:

    Dear Manish,
    I transferred some 9 lacs to my wife’s account from my retirement benefits. She invested same with her friends in a housing scheme. I am still supporting scheme from my account funds. There is no profit due to downward in reality. House will be ready in next two to three yrs. Income tax authorities have sent her sms to file IT Return for that year. She has never filed IT Return earlier as her income has been minimal due to savings, small gifts from relatives and self employment. All transactions are through cheques. What do you advice please.

    1. You need to meet a CA and file the returns

  194. Yes, it would be taxable .

    Manish

  195. J P Gupta says:

    Return/interest on money gifted to wife will be clubbed in husband’s income so if money is gifted to major son and son gifts it to his mother then what will be the scenerio? Kindly guide.

    1. Not allowed , you cant just fool the system like this 🙂

  196. DARSHAN says:

    My wife’s file is showing negative capital due to excessive loss in share market and loan borrowing from relatives. Can I gift her a amount say 10,00,000. by which she can repay the amount sue as loans.
    Will this be taxable in either my gfle or her
    Thanks

    1. It will not be taxable because its not getting invested anywhere !

  197. Vish says:

    Hi , one of my friend want to gift me 80 lacs.
    Q1 Its taxable to whome me or my friend
    Q2 what document req to be take from friend.
    Q3 How much tax need to be pay.
    Q4 What IT actionable.

    1. 1. You
      2. None , if its bank transfer, the entry is already there
      3. That will be added to your income and tax needs to be paid as per slab
      4. NOt sure what you want to ask

  198. nik.mundhra says:

    Hi,

    My Aunt was widowed few years back and she was remarried soon after. Now her ex-mother-in-law wants to gift her amounts in excess of the stipulated tax free limit of Rs. 50,000. The amounts would be transferred through online banking and she would also be furnishing a letter for the same along with her PAN no.

    Will it be taxable?

    1. Hi Nikunj

      Yes its taxable . There is no relation between them now . Hence above 50k it would be taxable ! . But if this gift was done on the marriage, as marriage gift, then its ok ! , no tax

  199. irfan says:

    agar main ek makan 16 lakh ka apne frend ko rajesterd deed se gift karta hun to kya tax mujhe lagega

  200. Buddy says:

    Hi,

    Thanks for sharing loads of information on this site.

    I would like to gift Rs. 2 L to my mother-in-law and a few shares on off-market transfer to my grand-mother. Will either be taxable? What additional tax paper work will be needed? Thanks.

    Buddy.

    1. If you are going to do the online transfer or through cheque then no paper work is required

  201. hitesh says:

    Hi,

    If i transfer 1lac rupees to my father as gift or , just like this for his expenses, do i get deduction in my taxable income? what is the limit.

    1. You never get any exemption !

  202. Divya says:

    Thanks 🙂 for quick reply.

  203. Divya says:

    Hello Manish
    I want to know about a case where father gifted a car to his major son by taking a loan from bank in his own name. What is the tax implication in it? Can father get deduction for that interest?

    1. Hi Divya

      There is no tax exemption on loan for car taken !

  204. Rushi Babariya says:

    Sir, please help me to understand….. My cousin is going for Australia, nd for visa we collected 17 lacs cash nd directly deposited to bank account…. Now we got scrutiny, now what should we do

    1. Hi Rushi Babariya

      You should not have deposited it like that. Lots of cash deposited at once creates issue. If you want I can connect you to our tax partners who can solve your scrutiny case, but they will charge fees for it . Let me know

      Manish

  205. Shravan says:

    Hi Manish,

    First of all Thanks for the interesting article. As per the below list
    Your spouse
    Your brother or sister
    Brother or sister of your spouse
    Brother or sister of either of your parents
    Any of your lineal ascendants or descendants
    Any lineal ascendant or descendant of your spouse
    Spouse of the persons referred in above points

    Any one can give gifts to avoid tax ( taxable income ) as long as they have proof of transactions.

    Do they have to mention the same in their IT returns ?

    If yes, its a great idea to save tax as well as helping our family.

    Please suggest.

    Thanks,
    Shravan.

    1. Shravan

      As I mentioned in the article,. You cant save tax on the money you gifted, Tax saving happens only for the person who got it !

      Manish

  206. nitin says:

    dear manish,
    really a gr8 article. my query is
    I transfer rs 10000 monthly to my mom’s account and around rs 15000 to my wife’s account. all the transaction is done thru net banking. can I claim IT deduction for the same. if yes how to file it in the IT return form. pl advise
    major nitin

    1. No you cant claim . As I said in article, you can never claim the deduction for the amount you are transferring, read our article https://www.jagoinvestor.com/2015/02/gift-tax-rules-in-india.html

  207. Bhupinder Kumar says:

    Dear Sir, I m govt. of Punjab state employee. my father gave me Rs. 40 lacs after selling their house to help me for purchasing a new house on my name. my father will pay me by cheque.From your article above, I came to know that I need not to pay tax. But I want to avail tax exemption. May I need to make gift certificate or I simply get written from him on a plain paper that he gifted me this much sum? Please help? Or I need not to show it in my ITR.

    1. Just ask him to make you payment via cheque/netbanking/DD , so that it can be tracked back ! . Else it will become your income if its in CASH etc !

  208. jayashree sheware says:

    Hello sir
    I am a GOM employee. I got rs 9 lakhs from my mother. she has sold her personal property and the received amount she distributed among her childrens out of affection. She has given me cheque and I deposited it in my normal salary account. From your article above, I came to know that I need not to pay tax. But I want to avail tax exemption. May I need to make gift certificate or I simply get written from her on a plain paper that she gifted me this much sum? Please help? Or I need not to show it in my ITR.

    1. In your case, you dont need to do anything . You dont need to pay any tax on this Rs 9 lacs .

      Manish

  209. Pravakar says:

    Hi Manish,

    Thanks for this post, which is very Informative !! I am having one query as below.

    1> My wife is housewife and her income is CASH through home tution. How she can able to file her Income under which head ?

    2> We don’t have any document for the CASH income. How she can able to justify, if Income Tax scruitiny happens ?

    3> How much CASH incme she can able to show in one 炉石传说电竞 Year ?

    Would like to appreciate early response !!!
    Many thanks in advance !
    Pravakar

    1. ashalanshu says:

      Being income from business/profession, she needs to file and report the same in ITR-4.

      thanks

      Ashal

    2. Is she depositing the cash in her account or not ? Because if its not going in the account, then officially there is no income ? She can put upto 2.5 lacs of cash without any issue !

  210. Shaan says:

    Dear sir,
    Thank you for this informative article. Recently, a friend of mine had a serious accident and is in coma. As the hospital bill is running into lakhs now, we thought that we would raise funds from various sources and transfer the amount to his father’s account. This amount may be to the tune in tens of lakh. Would his father be be taxed on this amount? The amount will be paid to the hospital within 2 or 3 months. Thanks.

    1. ashalanshu says:

      If later on the same amount is returned by father to all of you, it ‘ll not be his income.

      Thanks

      Ashal

  211. Narendra says:

    Hi,

    Would you please help to understand that If I gift money (or Gold/ELSS etc) to my spouse then will I be eligible for any exemption?
    Thanks
    Narendra

  212. John says:

    Hi Manish,

    Can I transfer 1 lakh to my MIL through NEFT on a single day? Willl there be any tax implications?

    Thanks,
    John

    1. John says:

      It is not a gift btw. She is borrowing funds from me. She will repay it with interest on a monthly basis.

  213. Sri says:

    Hi Manish,

    I didn’t go through the whole list of responses.Regarding the 2,00,000 limit on a credit card

    * Is it payment made or transactions in a single year ?

    * Is it the spending/payment on one card or total of multiple credit cards in a single year ? I have card from different companies.

    * Is it calculated from Jan-Dec or April to March ?

    Thanks

    Sri

    1. Its the payment done in a year on total of your cards in a financial year (April – March)

      Manish

  214. sham says:

    Sir,

    While selling property to sister/brother is it possible it show it as a gift?

    Like I gift the house/land to my sister/bro and she/he gifts me back the property value in cash to avoid tax?

    1. No Sham

      This is not possible , if you are giving it as GIFT , that means there is no consideration in between . What you want is a clear indication that you want to bypass the rules. Its just not possible !

      Manish

      1. sham says:

        Sir, As far as by passing the rules is concerned, even if I dont pay tax on the capital gains from the property sale when given as gift, When my brother is selling it he will be anyway paying the capital gains on the full amount.
        for eg: if I bought a land for 5 lakhs and if it is now worth 10 lakhs, I gift my land to my brother for free and in return get 10 lakhs as gift. Now if my brother sells it he has to pay capital gains tax on the full amount (-registration charges) i.e 10 lakhs. The capital gains tax will anyway get paid on the final sale out of the family . How is this bypass?

        1. ashalanshu says:

          It’s possible. The only thing is – to complete the gifting of property in question, the same should be registered in the name of your brother.

          Thanks

          Ashal

  215. R.P.Narasimhan says:

    Dear Sir,
    My son would like to transfer a sum of rs Fifteen lac each to me and my wife as gift out of his earnings after paying tax on the earnings. My queries are is the amount taxable in my hand( I am aware that the interest on the deposit is taxable) how do I explain to the income tax authorities if my case is taken up for scrutiny? Can the amount be treated as the repayment of the educational expenses I had expended on his graduate and management education? What kind of document do I prepare to record the transaction ? I shall be obliged to receive your considered opinion.
    Thanking you in advance,
    R.P. Narasimhan.

    1. Chill Sir .. you dont have to do much . You can surely show the officials that its coming from your son banks account and its a gift. nothing will happen (because anyways there is no cheating in this)

  216. Aadesh says:

    Can my uncle who resides abroad send me a gift? And how often can he do that?

    1. Yes he can do that .. he can do it any number of times !

  217. ANIL says:

    i give my father gift?

  218. Chandrashekhar Kumar says:

    My father in law deposited 2.5lac in cash my account due to some reasons, now I am transferring it in his account. Will it be taxable to me?

    1. You have no proof that cash was deposited by father .. I know you are saying truth , but how do you prove it ? You will have to pay tax on it ..

  219. Sohanlal Mathur says:

    I am a Retd. Gov. servent.I gifted 6.50 Lakhs to my unemployed son he kept 50k for his use and got a FDR for 6.0 Lakhs for one year on maturity of FDR he will earn intrest.Whether this intrest amount will be clubbed with mine income or will be income of son???
    Thanx

    1. It will be clubbed with son’s income !

  220. rohan says:

    Dear Sir,
    There is a peculiar situation came across me. If mother in law (Super Senior Citizen) from her account GIFTs Rs X lakhs to her daughter in law (housewife – no other income) in her account. Both of them are below their taxable income. The same amount will be invested in FD on daughter in law’s name and the interest earned on that will be transferred to mother in law account as the interest is received (auto renewal & interest redeem ). What will be the tax implication for both of them. Do any one of them needs to file ITR ?

    1. Rohan

      The income will be treated as daughter in law income only and taxed in her hands

      Manish

  221. Ravi says:

    hello i just want to know ,
    if i book airticket worth Rs.5600 for company visit and i m raising reimbursement towards company 10000/- against same. its liable for Tax.

    Thanks

    1. If you are getting excess amount, then its your income ! and yes it should be taxable !

  222. ashalanshu says:

    Dear Brijesh, in simple words, you have been fooled. Should I say more?

    Thanks

    Ashal

  223. ravikishore says:

    Hello, I need a brief clarification on my question…
    Basically i do real estate where it involves in a matter of crores, lakhs etc….if the deal was sucess and the owner is ready to pay me a sum of amount exmple – 50 lakhs…then how he wil deposit?? even it is owners wish on how he wil pay…but we know that he cant pay by hand…so max he may choose transfering option through net banking..so is it possible to transfer that much amount? and after recieving the amount,does bank people come to know that my account was filled with huge amount????do they question me??? wat about income tax??wat problems should i face and how to come out from the situations…reply me briefly in each aspect sir please ..even suggest me if anythng to say….thanks 🙂

    1. ashalanshu says:

      Please contact a CA, as it’s not gifting, it’s your income from your profession of property broking.

      Thanks

      Ashal

    2. If any amount is deposited in your bank account , even if its Rs 1 , bank knows it and even Income tax department can know it . They will know for it sure, if its above 2 lacs in one go .. and now its upto you to prove what exactly it is, income or not .

  224. sameer says:

    Hi!
    I have invested in busiuness abroad and receivinh monthly income from my friend abroad who is looking after the business.

    What if i receive the money on my moms name ? Will it be taxable after 300k tax slab for women?
    If i invest the money received on my name into varoius investment vehicles can i save sone tax?
    I receive 50k per month. Can this be distributed on.my name.and may mom name to save tax?
    (250k and 300k tax free for me and mother).

    1. You can distribute it between yourself and mom , but the only problem is that tomm if there is income tax scrutiny , then how will you explain about this money transfer to tax inspetor ?

      Manish

  225. satya says:

    Hello Mr Manish,
    If I receive amount of around 1 lakh rupees from my friend in one financial year and then repay it in the next financial year, am I supposed to pay the gift tax on it?

    1. ashalanshu says:

      Dear Satya, the plain answer is NO. But to treat it as loan with out interest, you and your friend should prepare a document for the same.

      Thanks

      Ashal

    2. No 🙂 .. just make sure its done via bank transfer so that the transaction is clearly visible !

  226. Susan J says:

    My husbands paternal uncle wants to transfer a flat that he owns to my husbands name.
    What is the simplest and least expensive procedure for this transfer.
    Also we have no idea of how much the whole procedure costs. Please advise.

    1. Better see a lawyer for this . He will have to make a GIFT deed and initiate the transfer

  227. Ash says:

    Hey
    Very nice article. I have an urgent query and would appreciate if you could help me with it. We have a property in my mothers name and now that has been sold to someone. I understand that the proceeds from the sale will have to be deposited in my mothers name. And to save on the capital gain we also plan to purchase a new residential house with the sale proceeds.
    The question is the new house will be in my name since I will be taking some loan to buy that new house. Now would the bank ask me to do downpayment from my own account? Or can I do a downpayment from my mothers cheque and still be eligible for a loan.
    Or would it be better if my mother gifts me the sale proceeds for the purpose of buying a new property? In this case would both me and my mother will be exempted for capital gains.. Since she will be gifting me money which actually is the sale proceeds of the old house.

    Would like your opinion on the same.
    Regards

    1. Rahul Sharma says:

      You will be eligible for loan if payment will made from your account only.
      Your mother has already sold house to someone. Capital gain has arise in the hand of your mother. To save this capital gain either consideration of this sold out property shoud be submitted in the capital gain bank account or purchased a new house only in the name of your mom under section 54.
      If your mother will gift consideration to you, then your liabilty will be nil on the gifted consideration but capital gain will arise in the hand of your mother.

      It is better to purchase new home in the name of your and your mother as a co-owner. By this, Capital gain liability will be nil in the hand of your mother subject to share ratio of new property and also you can pay downpayment from your account.

    2. I think the downpayment has to be done from your own account. Your mother can transfer the money to your account, there will be no taxation issues in this case, as its totally fine to take money from mother. But I have no idea if she can claim the capital gains tax properly !

  228. Rajesh says:

    Thank you Mr. Rahul for the prompt response! Really appreciate it…

  229. Rajesh says:

    Hi,

    It would be really wonderful if you can help me with this query.
    My father is a retired person, with no income except the interest on Fixed Deposits that he has made. He is planning to sell a house which was in his name and want’s to help me in buying a house (in my name) in another city by gifting me money. He intents to put the money in my and my wife’s bank account in instalments.
    Can you please tell me:
    1. What are the legal formalities required on his part to gift us the money?
    2. What would be his tax liability?
    3. What would be my tax liability because of this gift?
    4. Should the house ( that we intend to buy) be registered in both mine & my wife’s name? or would it be fine if I register in my name only?

    I would really appreciate your response

    Many thanks.

    1. Rahul Sharma says:

      (1) There is no any specific formalities but your father may write on a plain paper mentioning that he has made gift to you and your wife along with money ,date & way of mode. In case your & your wife’s income tax case will found in scrutiny then this statement will help you for explaining this transaction.

      (2) Your father’s liability would be capital gain which arise from sell of his house.

      (3) There is no tax at all on gift. so your liability is nil

      (4) There is no mandatory requirment that house should be registered with both name. even your wife can also gift to you. But your registry charges(stamp paper ) would be less if any ladies name (your wife name) will register in sale deed.

    2. 1. Note that a father can gift any amount to you guys without any documentation .
      2. The money he will gift you has to come form his POST Tax income, so he will not save any tax on it
      3. None
      4. You can register it in your name only if you want. No issues

  230. Kumar Gaurav says:

    Hi Manish,
    My father has recently retired. I have to buy a car and he is helping me to buy it. Will it better to take it as a gift or a loan form IT perspective?

    1. Rahul Sharma says:

      It is better to take it as a gift because if you will take as a loan then you should pay interest to your father as per IT rules and also tds liability on that interest will arise . Your liability will arise to make deposite tds on govt account.

    2. You wont benefit in any way because there is no income tax benefit for car loan 🙂

      So just ask him to transfer the money to your account, or he can directly make payment for car .

    3. ashalanshu says:

      Dear Gaurav, From financial perspective, why do you want to ruin your father’s retirement? If you want to purchase a CAR, please take a loan from bank and pay interest to bank.

      Thanks

      Ashal

  231. Nakul says:

    Hi Manish

    I have one query related to gift deed and capital gains tax for residential property.
    My father has 2 flats on his name. He wants to sell one of the flat and buy a new one. But the flat he wants to sell has appreciated by 5 times and would attract considerable capital gains tax if he sells it and buys a new one.
    To avoid that, can he gift the flat to me with proper gift deed prepared and stamp duty paid and then I sell that flat to buy a new one? Currently I have no flat on my name, and my father would not mind if the new flat is on my name instead of his.

    What I’m trying to do is save capital gains tax by paying lesser amount of stamp duty while preparing gift deed. I want to ask if it is a correct approach or has some flaw in it?

    Thanks & Regards
    Nakul

    1. Rahul Sharma says:

      Yes, it is good approach. There will be no capital gain whether in your hand and father hand. You will get benefit u/s 54 in respect of sale of old sale.

    2. It will not work

      Even if you sell it later, the taxation will come into picture the same way . I think you should discuss it with CA

      Manish

    3. ashalanshu says:

      Dear Nakul, if you are receiving the flat as gift from your father, it’s construction or purchase price ‘ll remain same for you. How come you can save on LTCG tax liability?

      Please disclose that this 5 times gain is indexed or not?

      Thanks

      Ashal

  232. Rahul Sharma says:

    Dear Sir,

    Gud evening sir, please solve my query.

    I have one query regarding Tax on Capital gain or Gift .

    My father has sold his property to my massi(Mother’s sister) for the consideration
    of Rs.20 Lakhs. Registry of this property will not be made in the name of Massi.
    i.e property will not be transferred to massi on documents. After receiving
    consideration, Father has transferred consideration to his son bank account.
    Then after Son has purchased another property for a consideration of Rs.40 lakh
    by using this fund Rs 20 Lakhs & loan from Bank Rs.20.

    So my Query is that:

    1. What will be tax implication on father & son income ? Whether father can claim
    Deduction Under section 54.

    2. Whether these transaction can be claimed as a gift. If so, then it will be
    exempt in the hands of father & son ???

    1. This is a bit complicated and a CA should be consulted for this

    2. ashalanshu says:

      Dear Rahul, How your father is going to show the receipt of 20L Rs. from his Sister in law (your masi) in his own income tax return? If there is no actual name change in property, there is no sell of property unless some kind of agreement is there to register on a later date.

      Can you share more details?

      Thanks

      Ashal

  233. uday says:

    Hi,
    My parents are retired and I paid monthly 50k for their expenses .. if they invest some portion or total amount on shares or real estate. who will be taxed on that gains ?

    1. ashalanshu says:

      Dear Uday, the income ‘ll be in the names of of your parents, hence taxable to them only.

      Thanks

      Ashal

  234. yogi says:

    sir i have taken almost 11,00000 almost from my friends & family, to invest in share trading, returning them time to time. those transactions are listed in bank account, will i have to pay income tax for that. if yes than how i have to pay. thanks & regards

    1. ashalanshu says:

      Dear Yogi, if you are returning back the taken amount, you can treat this amount as loan and should have loan deed for the same.

      Thanks

      Ashal

    2. Yes, you will have to pay income tax on that.

  235. ramakrishna says:

    sir,please clarify this doubt.
    my son had employed after his engineering, in a company. he worked for 18 months. and later he resigned. now he is unemployed. I am giving him 20000 per month. can his income tax show this amount as “income” and can he file return next year. Please advise.
    ramakrishna

    1. ashalanshu says:

      Dear Rama, the money paid by you to your son is tax free for him, why do you want to treat this as income for him?

      Thanks

      Ashal

    2. Its not his income . He does not have to pay any income tax

  236. Rakesh sahoo says:

    Dear sir,
    I want some clarification.

    My own uncle was in need of money. Of 2 lac. So i helped him by taking a Personal loan on my name. Now every month he deposits the emi amount to my account and the same amount is also deducted from my salary. In this case the amount deposited by my uncle, will it be taxable to me.

    Secondly. My father got rs 15 lac after his retirement. Now he gave me 10 lac for use in my marraige which is in near future. So will that amount will be taxable.
    Now , if i invests the same in fd. Then who will be charged for the tax. Father or me.
    Do i have to make any documentation for the same.if yes., what kind documentation or deed ,i have to do.

    Kindly suggest.

    1. ashalanshu says:

      Dear Rakesh, the EMI amount received by you from Uncle is not taxable to you. Money received from your father is also tax free.

      If the father money is invested in FD under your name, the interest ‘l be taxable in your own name.

      Please prepare gift deed for you and father and loan deed for you and uncle.

      Thanks

      Ashal

    2. No , the money will not be taxable in your hand, but how did you pay your uncle the money , If it was withdrawn and paid in CASH, then you have no proof that its a loan .

  237. Rohan says:

    Dear Sir,

    My parents have shares of almost Rs.120000/- in their join name. Now they want to give that shares as gift to me.

    If i sell that shares after few days / month and buy car with that shares amount and my personal savings then what it effect in my i.t return?

    Is there any tax i have to pay in above ?

    Thanks,
    Rohan

    1. ashalanshu says:

      Dear Rohan, what’s the holding period of such shares in your parent’s demat account?

      Thanks

      Ashal

      1. Rohan says:

        Dear Ashal,

        Holding period is more than 20 years and this shares are in physical form only not in demat.

        Thanks

        Rohan

        1. ashalanshu says:

          Dear Rohan, in my personal opinion, convert these shares in demat mode under your parents’ name and sell from there only to save on transfer costs.

          Once money is there with your parents, they can gift it to you and you can use the money for your desired way. No tax ‘ll be there on your parents for selling the shares and no tax on you receiving the gift of money from your parents.

          Thanks

          Ashal

    2. Not you, but your parents might have to consider the taxation part !

  238. SM Vishwanath says:

    Dear Manish, Greetings and thanks for all the information on this lovely blog.
    I put up a query with a tax consultant and raising the same here …….. I shall be obliged for a clarification regarding this query !
    Myself and my wife – are ‘professionals’,have separate incomes and are regular ‘individuals’ tax-payers.
    Can my wife ‘gift’ me – say 1 lac out of her ‘tax-paid’ income by cheque ?
    If I invest this amount in FD, will the interest generated from the same be deemed as my income or will it deemed as hers (clubbed) !
    The point I want to make here is – my wife and myself are having separate sources of income – then how can this interest income from FD of the gifted amount be ‘clubbed’ with her income. I sincerely believe ‘clubbing’ provision comes if the ‘spouse’ does not have a ‘separate’ / ‘independent’ income like in case of a minor. If the spouse already has ‘independent’ income from ‘multiple’ sources then this gift interest income should not be clubbed with the other spouse’s income. I shall be most obliged for a reply on this query ! Thanks and best regards.

    1. ashalanshu says:

      Dear Vishwanath, clubbing provisions ‘ll still apply.

      Thanks

      Ashal

      1. SM Vishwanath says:

        Yes ! You are right ! Many thanks and regards.

    2. It will be considered as the income of the person who has a higher tax slab .

  239. anubha says:

    Hi

    If we are presenting a gift( cash amount) to our parents, then they dont have to pay tax on it. But somewhere I read that the gifted amount will be reduced from our taxable income and thus gifted amount will become non taxable to us also. Is it possible? If yes then under which section we should mention this in ITR form. Please reply.

    1. SM Vishwanath says:

      The gifted amount cannot be reduced from your taxable income. You have to pay tax on your income. However, your parents do not have to pay tax on your gifted amount.

    2. There is nothing like that. Your gifts come out only from your POST TAX INCOME

  240. dev says:

    Hi,
    my father wants to gift me his property. what tax rate/stamp duty or any other expenses will I have to incur?
    Rgds

    1. ashalanshu says:

      Dear Dev, please contact an advocate in your city to know the stamp duty applicable in your case.

      Thanks

      Ashal