14 Oct
TAXABLE AND TAX FREE GIFTS
TAXABLE AND TAX-FREE GIFTS
According to the Income Tax Act, the property received by
the taxpayer without compensation or underpayment is counted in his taxable
income.
Giving and receiving gifts is part of our culture. Gifts
are given or received on the occasion of wedding, birthday, Diwali etc.
According to the Income Tax Act, giving and receiving gifts is the exchange of
property without any payment. Money transferred without compensation or
inadequate compensation is considered as a gift of real estate or certain
movable property. Some gift transactions are also used to illegally reduce tax
liability. The provisions of the Income-tax Act have been amended from time to
time to curb tax evasion through such transactions and new provisions have been
implemented.
According to the Income Tax Act, the property received by
the taxpayer without compensation or inadequate compensation is counted in his
taxable income. These assets include cash, real estate (land, building, etc.),
fixed movable property including shares, bonds, gold, silver, jewellery,
paintings, sculptures, etc.
If the gift is received
in cash: If the amount received in cash is less than
Rs. 50,000, it is not counted as taxable income. If more than Rs. 50,000 is
received in cash, the entire amount is counted as taxable income.
If the gift is received
in the form of immovable property: If the property is received without any
compensation and the value is more than Rs. 50,000 as per the assessment of
stamp duty, then the entire value is taxable. If the property has been received
inadequate compensation and the value as per stamp duty assessment is (a) more
than Rs. 50,000 and (b) 10 per cent or more of the compensation, then the
difference between ) Amount is calculated in income.
If the gift is received
in the form of movable property: If a certain movable property is received
without any compensation and its fair market value exceeds Rs. 50,000, then the
entire value is taxable. If the property is received in inadequate compensation
and the compensation is less than the fair market value and the difference is
more than Rs. 50,000, the difference is calculated as income.
Important
things to remember
If these gifts are received from certain relatives, they
are not counted in the taxable income. There is no limit to this amount,
certain relatives include spouse, mother-father, brother-sister, husband or
wife's brother or sister (and their spouse), mother or father's brother or
sister (and their spouse) and lineage Consists of individuals.
Apart from this, gifts received from marriage,
inheritance or death certificate or property, money received from a charity are
not taxable as gifts.
GIFT
TAX FOR NRI
The Income Tax Act for NRIs was amended last year.
According to this change, if a resident Indian transfers money, immovable
property or certain movable property in India to a non-resident Indian without
compensation or in insufficient compensation, such income will be treated as
income accrued or accepted in India. Income accrued or accepted in India is taxable
in India to NRIs. Previously, such income was not considered accumulated or
accepted in India. But gifts received by such NRIs after July 5, 2019, are
taxable in India. Non-resident Indians may not be taxable for gifts received
from certain relatives or gifts received at weddings
Author
Santosh Patil
Founder @ Alliance Tax Experts
9769201316
#alliancetaxexperts #accounting #business #accountant
#tax #taxes #accountingservices #accountants #businessowner #incometax #taxconsultant
#charteredaccountant #incometaxexperts #taxagent #taxprepare #taxseason
#efiling #gstconsultant #taxongift #gifttax #expertsadvise