Query – I have received cash gift from relatives on different dates as per details mentioned below :-
1. Cash gift from mother rs:190000/- through on cash mode dt:10-05-22
2. Cash gift from brother rs:180000/- through on cash mode dt:25-05-22
3. Cash gift from husband’s brother rs:170000/- through on cash mode dt:17-06-22
4. Cash gift from mother’s brother rs:160000/- through on cash mode dt:24-06-22.
Question: Whether Above gifts from relatives transaction allowed in Income Tax Act?
Ans – In India, the Income Tax Act governs the taxation of gifts, including cash gifts. According to the provisions, gifts received from certain relatives are exempt from tax. These relatives include parents, siblings, and other close relatives. Here’s how the gifts you mentioned are treated under the Income Tax Act:
1. Cash Gift from Mother (Rs. 190,000 on 10-05-22) : Gifts from mother are exempt from tax. There is no upper limit on the amount that can be received tax-free from your mother.
2. Cash Gift from Brother (Rs. 180,000 on 25-05-22) : Gifts from siblings are also exempt from tax. This amount is not taxable.
3. Cash Gift from Husband’s Brother (Rs. 170,000 on 17-06-22) : Gifts from a brother-in-law (husband’s brother) are considered exempt under the Income Tax Act.
4. Cash Gift from Mother’s Brother (Rs. 160,000 on 24-06-22) : Gifts from an uncle (mother’s brother) are also exempt from tax.
In your case, all these gifts are exempt from tax as they are from relatives as defined under the Income Tax Act. It’s important to note that although these gifts are not taxable, the Income Tax Department may scrutinize large cash transactions. Hence, maintaining proper documentation and proof of these transactions (like gift deeds or confirmation letters) is advisable in case of any inquiry from the tax authorities.
