Taxability or nontaxability of Gifts received

[SANJAY BAHETI]

Dear Experts,

Please let me confirm as to receipt of Following Gifts from Relatives by an Individual are exempt from tax or not by way of Acceptance of Account payee cheque from Donor on Stamp paper of Rs.100/- by means of Gift Deed irrespective of any amount without ceiling at any time. Detailed as under :-

i) From Individual's married Brother or Sister.

ii) From Individual Spouse's Married Brother or Sister

iii) From a Member whether male or female to HUF will be treated as Gift received from relative or not

iv)From Individual's spouse to Individual himself or vice versa. Please reply urgently as the same required for tax planning purposes.

Thanks in Advance for prompt reply. 

[Sanjeev Sharma]

In accordance with Proviso to Section 56(vi), Gift from relative is not part of Other Income.   

As per Explanation, For the purposes of this clause, “relative” means—

       (i)  spouse of the individual;

      (ii)  brother or sister of the individual;

     (iii)  brother or sister of the spouse of the individual;

     (iv)  brother or sister of either of the parents of the individual;

      (v)  any lineal ascendant or descendant of the individual;

     (vi)  any lineal ascendant or descendant of the spouse of the individual;

    (vii)  spouse of the person referred to in clauses (ii) to (vi)

AI Summary

Gifts from relatives exempt under Section 56's proviso; defined relatives include spouse, siblings, lineal ascendants and descendants. Gifts received from specified relatives are excluded from other income under the proviso to Section 56(vi). The statutory definition of 'relative'-including spouse, siblings, siblings of the spouse, siblings of either parent, lineal ascendants and descendants of the individual or the spouse, and spouses of those persons-determines whether a transfer qualifies as a non taxable gift.