Is Gift to Daughter in Law Taxable in India

In the case of HUF – Each member of the HUF However, the following points should be noted with regard to the donation: – For the recipient: – According to Article 56 (2), the recipient is not obliged to pay taxes on the amount received as a gift from a relative. But according to Article 269S, no one can receive an amount of INR 2 lakhs or more in cash for a single transaction from a person in one day. The consignee must comply with the provisions of Section 269ST, failing which a penalty (equal to the value of the transaction) may be imposed. For the payer: – The donation is given from the money remaining after the payment of the tax, so the amount given will not be taxed again in the hands of the payer. For example, I earned Rs. 100000/- and paid taxes Rs. 30000/- and now I have Rs. 70000/- Then I gave my daughter-in-law Rs. 50000/- of that lost money. Therefore, this donation value of Rs. 50000 / – is already taxed in the hands of the payer, so it is not taxed again.

But under section 64, if assets are transferred directly or indirectly from you to your daughter-in-law for insufficient consideration, all income from those transferred assets will be placed in the hands of the transferor. In your question, the monetary gift to the daughter-in-law is Rs. 150,000, which is paid without adequate consideration, but is nevertheless exempt in the hands of the recipient under section 56(2). And this sum of Rs. 150000/- is already taxed in the hands of the payer and is therefore no longer taxable. But if your daughter-in-law earns income by investing that money like FD, the stock market, or any other source, then the income your daughter-in-law earns that way will be combined with your income. This is treated as your income and it is taxed in your hands and not in the hands of your daughter-in-law. Gift-giving is one of the most common ways to transfer money or goods to India. It is also used as a means of tax planning or tax avoidance, which is why the government passed the Tax Donation Act in 1958. This provision was abolished in 1998 and donations are subject to the Income Tax Act 1961. Gifts received by the employer up to Rs 5,000 per annum are exempt from tax. For example, an employee receives Rs 15,000 as a gift from the employer, tax is deducted from Rs 10,000.

However, if money is given to an NRI, the donor must follow the Reserve Bank of India (RBI) regulations for repatriation. The standards of the liberalized remittance system (LRS) must be followed when sending money. For tax purposes, a gift is the receipt of money, property or benefit in kind by a person without sufficient consideration or in return. For the receipt of gifts the total value of which exceeds Rs 50,000 per annum, the total amount is taxable under Section 56(2) of the Income Tax Act, with certain exceptions. Immediately after her son`s wedding, an appraiser can start planning taxes for his daughter-in-law. The daughter-in-law must not receive, directly or indirectly, gifts from her husband, mother-in-law or father-in-law. Gifts, if any, received at the time of the wedding occasion must come from relatives other than the three categories mentioned above. Thus, the mother, father, brother, uncle, aunt, grandfather, mother-in-law, brother-in-law or sister-in-law of the bride can give her gifts so that she has independent means that allow her to have a separate income tax file and to be assessed separately, so that the income from these gifts, etc. are not related to her husband`s income.

With the help of these donations, she can even join a partnership company, start an independent business, buy property, or make other investments. The income from these sources would belong exclusively to the daughter-in-law and would be taxable separately in her own hands for income tax purposes. The provisions relating to the recognition of the value of the stamp are similar to those laid down in Article 50C. Let`s briefly discuss the gift tax provision below: All donations must be reported on their tax return. All exempt income earned during the year must be reported on Form ITRs in accordance with Schedule EI. The gift tax provisions have been dealt with in section 56(2)(x) of the Income Tax Act 1961. These provisions have been briefly summarized in the form of the table below: Thus, the daughter-in-law, who is the wife of the parent`s ascendant or descendants, would fall within the above-mentioned definition of the term “parent”, so that the money she receives, regardless of the amount, would not be taxable in the hands of the beneficiary. The fact that the daughter-in-law is abroad is irrelevant in determining the taxation of the gift in the hands of the beneficiary.