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From now on, when you get a gift in kind, valued at more than Rs. 50,000, from your parents or other relatives, make sure you have a sworn affidavit declaring the donor your kin.The Central Board of Direct Taxes has ruled that any such gift will be taxable for the donee unless it is from relatives or given during occasions such as marriage or by way of inheritance.

On-the-spot verification

“The donee has to get an affidavit affirming the donor to be his mother, father, brother, sister or any other relative so that at the time of claiming exemption under the new arrangement, the income tax assessment officer can have an on-the-spot verification,” a senior IT official said.

An individual could preferably get one affidavit listing all gifts taken in the entire assessment year from different relatives or the same kin. The affidavit would save IT assessees the hassle of proving that the gifts, movable and immovable, were received or inherited from a relative residing in any part of the world. It would also establish the donee’s relationship with the donor, the official said.

The CBDT on September 30 notified that “with effect from October 1…. any gift in kind, being an immovable property or any other property, the value of which exceeds Rs. 50,000, will become taxable in the hands of the donee, being an individual or a Hindu Undivided Family (HUF), as income from other sources…”

The department will not tax gifts received from a relative on the occasion of marriage of the donee, under a will or by way of inheritance, in contemplation of the death of the donor, from any local authority as defined in Section 10(20) of the Act, from any fund or trust established under Section 10(23C) and from any trust or institution registered under Section 12AA.

Assesses will have to file income tax dues on the value of the gift and disclose its taxable value in the returns for the assessment year 2010-11.

Under the IT Act 1961, a relative is defined as a spouse, brother or sister, brother or sister of the spouse, brother or sister of either of the parents, any lineal ascendant or descendant and spouse of any of the relatives.

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  1. manish gurejani says:

    if i take a gift in kind from my brother”s wife and brother’s son,then will it be taxable?
    and if it is taxable then after what amount?

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April 2024