Exempted receipt of Gifts by Individual - Proof

[Ethirajan Parthasarathy]

U/S 56 (2) amounts received consequent to WILL is exempt even if the deceased does not fit into definition of “relative” for the legatee. The executor of the WILL has released money to legatee, but he is not willing to share the copy of the WILL for obvious reason (Privacy).

What other proof our group can think of to support the legatee to get tax exemption since mere confirmation from the executor may not be actual proof of succession through WILL.

[YAGAY andSUN]

In the absence of a copy of the WILL, it can indeed be challenging to establish the tax-exempt nature of a gift or inheritance under Section 56(2)(x) of the Income Tax Act, particularly when the legatee (recipient) is not a "relative" as defined under the Act. However, there are still several practical alternatives and supporting documents that can help the legatee build a case for tax exemption on the amount received under the WILL:

✅ Alternative Proofs & Supporting Documents:

1. Executor’s Formal Declaration or Affidavit:
   • A notarized affidavit or declaration from the executor of the WILL confirming:
     • That the money was paid as per the instructions in the WILL.
     • That the legatee is named in the WILL.
     • That the executor has fulfilled his duties in accordance with the WILL.
   • This carries more weight than a simple confirmation letter.
2. Probate Order (if applicable):
   • If the WILL was probated in a court of law, a copy of the probate order (not the WILL itself) would substantiate the fact that the WILL was genuine and the distribution followed it.
   • This is public record and often does not breach privacy.
3. Bank Statements / Payment Records:
   • Proof of payment made by the executor to the legatee with narration mentioning "inheritance" or "distribution under WILL" helps trace the nature of the transaction.
4. Legal Heir Certificate (if relevant):
   • If the legatee is also a legal heir (even distant), a certificate from a municipal authority or court could further support the claim.
5. Correspondence / Communication Evidence:
   • Emails, letters, or messages from the executor indicating the bequest and instructions under the WILL can be supplementary proof.
6. CA Certificate / Legal Opinion:
   • A Chartered Accountant or legal professional can issue a certificate/opinion stating that based on documents and declarations, the amount qualifies as inheritance under Section 56(2).

🔍 Additional Notes:

• Section 56(2)(x) explicitly exempts amounts received by way of inheritance or under a WILL, even if the person is not a “relative” as per the Act.
• However, in case of scrutiny or reassessment, the Income Tax Department may require substantive evidence of the claim, hence some combination of the above proofs will be essential.

📌 Suggestion:

If privacy is a concern, you may request the executor to share only the relevant extract of the WILL (omitting other sensitive bequests) or request a CA or advocate to review it confidentially and issue a summary/declaration confirming the legatee’s entitlement.

Let me know if you'd like help drafting an affidavit, declaration, or a representational letter to the Assessing Officer — happy to help!

[Ethirajan Parthasarathy]

Dear sir

Thanks for detailed reply and appreciate your willingness to help me further on this issue 

will discuss with party and revert 

thanks again 

ethirajan

AI Summary

Inheritance Tax Exemption: Navigating Proof Challenges When Original Will Is Missing Under Section 56(2)(x) A discussion forum explores tax exemption for inheritance received through a will under Section 56(2)(x) of the Income Tax Act. When the original will is unavailable, alternative proofs are suggested, including executor's affidavit, probate order, bank statements, legal heir certificate, correspondence evidence, and professional certifications to substantiate the tax-exempt status of the inherited amount.