Gift to brother's spouse

[NEERAJ BHUTORIA]

i have given a gift of Rs 100000 to me elder brothers wife. whether the same is taxable or not. kindly advise

[DINESH AGGARWAL]

Dear Mr. Neeraj,

Brother's Wife is not a relative as per definition of Relative given under the Income Tax Act, 1961.  Hence in my opinon, the whole amount will be treated income of receipient (Brother's Wife).

 

Regards

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[Bakul Gandhi]

The gift is not taxable in the hands of brother's wifeas she is a relative as defined in Sec 56(2)-

 

1.......................................

2-  brother or sister of such indiividual   3.................................4................................5...........................6...............................and 7 spouse of the individual referred in above 2 to 6. Thus brother's wife being spouse of person under item 2 is covered under item 6

[Sunil K. Jain]

Dear Neeraj

As per section 56(v)(a) of the income tax act, and vide expalanation (ii) and (vii) there of ; brother's wife is covered under the definition of "relative". The same is therefore not taxable.

AI Summary

Definition of relative under Section 56: spouse of a brother qualifies, affecting taxability of gifts. Whether a gift to a brother's wife is taxable depends on interpretation of the statutory definition of 'relative' for gift taxation. If the spouse of a listed relative is encompassed by the explanatory language, the gift is excluded from taxable income; disagreement exists among commentators about that interpretive point.