Skip to main content

When Money Gifts are not Taxed?

Best SIP Funds Online 



Gifts are welcome in any form. Among gifts, many people prefer to receive cash because they can use it as they want to. However, unless received from specified relatives, these gifts can be liable to tax. But here is some good news. Under certain conditions, even monetary gifts do not attract income tax in the hands of the recipient. Read on to know more.


Exempt conditions

Tax implications on gifts are covered under section 56(2) of the Income-tax Act, 1961. The Act provides that any gift received in excess of Rs50,000 in form of cash, demand draft, cheque or specified assets by an individual or Hindu Undivided Family (HUF) is taxable under the income tax head 'income from other sources'. If its value exceeds Rs50,000, the whole amount is taxed. Remember that the tax applies not only to gifts received in cash, but also to those received in kind, such as: immovable property (including land and building) and specified movable properties such as jewellery, paintings, shares, debentures, bullion, and archaeological collections. The gift is taxable only in the hands of the recipient. However, below are certain conditions during which the gift does not attract tax.


Gifts from relatives: Any sum or property received, at any point of time, from certain relatives is exempt from income tax. According to the Act, these relatives include your spouse (husband or wife), brothers, sisters, brothers in-law, sisters in-law, parents, parents in-law, any lineal ascendants or descendants of the individual or spouse, and brothers or sisters of parents of individual or spouse.


Gifts at the time of marriage: Apart from gifts received from relatives for whatever reason, gifts received on marriage are also exempt from tax, irrespective of the relationship with the giver or value of the gift.


Gifts to HUF by its members: An HUF is a Hindu family (including Jain, Buddhist and Sikh families) which consists of all persons lineally descended from a common ancestor, including their wives and unmarried daughters. Under section 2(31) of the income-tax Act, an HUF is considered a 'person', and therefore a separate entity for the purpose of tax assessment. An HUF consists of the karta, who is typically the eldest person or head of the family, while the other family members are considered coparceners. In case a coparcener (member) gifts some money to the HUF out of his or her individual wealth, it will be tax-free in hands of the HUF.


Gift through Will and inheritance: If a taxpayer receives any amount or asset under a Will or inheritance, that is also tax-free in hands of the recipient.


Other conditions: Apart from the above, any sum of money or property received in contemplation of death is also exempt. Besides that, any gift received from specified local authorities, funds, foundations, universities or other education institutions, hospitals, Trusts or charitable institutions is also exempt from tax.




SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com 

Popular posts from this blog

Post Office Deposits Interest Rates

Best SIP Funds to Invest Online   SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich For further information on Top SIP Mutual Funds contact  Save Tax Get Rich on 94 8300 8300 OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com

How Tax Deducted at Source (TDS) works?

    THE tax season is here. And if you are an employee you can't blame your employer for deducting large chunks of money from your salary towards tax deducted at source ( TDS ), which he is legally obliged to do. Your bank will also deduct some percentage from your FD interest of Rs 10,000 or more towards TDS! So what is this TDS all about? How is it computed? Are there any changes this year? Read on... What is TDS? TDS reduces your taxable income and could even provide tax relief! The TDS collections account for 40 percent of the total taxes collected in the country. As the name suggests TDS is the amount of tax that is deducted at source in certain types of income . The TDS thus collected is deposited in the Government treasury within a specified time. How is it computed? Some of the types of income where TDS is applicable include salary, interest, rental fee, interest on securities, insurance commission, dividends from shares and UTI/Mutual Funds, commission and brokerage

Modern day balanced mutual fund approach

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India)   In reality, most balanced funds have a strong tilt towards equity instead of a mix of equity and debt THERE are various types of mutual funds available to investors with specific features. Often investors have a particular idea about a specific type of funds in terms of their features and risks, but that is not what is actually available. Therefore, it is necessary for an investor to understand the actual position before picking up a fund. This requires some work on the part of the investor. One example can be the situation with balanced funds. Name is not representative: One of the first things that an investor has to understand is that the name of the fund is often not representative of its investment pattern. The name often represents only the aim of the fund, and not what it actually is.

ELSS Tax Saver

ELSS Stands for Equity Linked Savings Scheme.   ELSS Fund are mutual funds with 3 years of lock in period and offer income tax benefit under section 80C. They are open ended to purchase. Not all Mutual fund Investments are eligible for tax exception. List of Tax Saving Mutual Funds   Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.   Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   These Application Forms can be used for buying regular mutual funds also   Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) HDFC TaxSaver ICICI Prudential Tax Plan DSP BlackRock Tax Saver Fund Birla Sun Life Tax Relief '96 Reliance Tax Saver (ELSS) Fund IDF

Should you invest in tax-free infra bonds?

THOSE looking to save tax should take note of the latest buzz in the debt markets. Power Finance Corporation ( PFC ) and Housing Urban Development Corporation (Hudco) have launched bonds that will help you save more tax than your regular infrastructure bonds. Soon, IRFC and NHAI are likely to follow suit with similar bonds. KP Jeewan, general manager, debt markets, Karvy Stock Broking, says: "The coupon in these bonds are completely tax-free and those in the highest tax bracket can expect an effective yield of 10.75 per cent, compared to the 9.5 per cent a 10-year public sector bond would offer." The PFC and Hudco offerings are of 10- and 15-year tenures, with coupon rates of 7.5 and 7.75 per cent, respectively. Unlike other regular tax-free infra bonds, the tax benefits in these bonds are not capped at ` 20,000. Even besides these tax free bonds, those in the highest tax bracket have had plenty of opportunities to invest in tax saving infrastructure bonds under 80 CCF i
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now