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GIFTS FROM RELATIVES TAXFREE!

No stamped document required for gift of movable property, But it is advisable to keep letter of gift from donor on record! Several AM readers poured in their questions in response to the article last Monday on gifts and income-tax liability. Some of these queries which touch issues of popular interest are replied hereunder:  LIST OF RELATIVES COVERED Query:  Your article states that gifts received by an individual...

PRACTICAL CASE STUDIES ON TAXABILITY OF GIFTS

Specified gifts received in cash or kind exceeding Rs.50,000 in value during the year are treated as income liable to tax !        Section 56(2)(vi) had cast income-tax liability only in respect of a ‘gift of any sum of money exceeding Rs.50,000’. In view of this clear language, any gift received in kind (not being any sum of money) clearly fell outside the liability for income-tax, irrespective of the value of...

TAX PLANNING FOR GIFTS TO WIFE!

Remember that income from accumulated income is outside the purview of Section 64!       In the context of the clubbing provisions under Section 64 of the Income-tax Act and Section 4 of the Wealth-tax act, it is important to note that the income liable for clubbing is such income arising from the amount of the gifted asset and the wealth liable for clubbing is such wealth representing the amount of the gifted...

SCRUBBING THE CLUBBING PROVISIONS

Gifts to Son’s Wife on the occasion of Marriage can help save smart tax for a lifetime!       The abolition of Gift-tax since 1st October, 1998 has also thrown open several opportunities for planning to reduce a taxpayer’s income-tax and wealth-tax liabilities. Moreover even under the provisions of Section 56(2) as effective from 1st September, 2004 (and further amended w.e.f. 1st April, 2006 and 1st October,...

WATCH OUT GIFTS YOU RECEIVE!

Specified Gifts in Cash or Kind exceeding Rs.50,000 in value treated as your taxable income! The scope of definition of ‘income’ u/s.2(24) was widened by the Finance Act, 2004 by providing that ‘income’ would also include any sum referred to in Section 56(2)(v). Section 56(2)(v) was introduced to provide that, “where any sum of money exceeding Rs.25,000 is received without consideration by an Individual or HUF from...

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