One of the most common modes of transfer of property and money is by way of a gift. A gift can be a transfer of movable or immovable property or transfer of money.
Gift is used to transfer property or money within the family or to relatives. Gift has also been used to avoid taxes due to which government had introduced Gift Tax Act, 1958 (GTA) to control tax evasion activities. Gift Tax Act, was later revoke and incidence of tax was incorporated in Income Tax Act, 1961.
Amount of money exceeding Rs. 50,000 received without consideration is taxable as income from other sources in the hands of recipient. Likewise, if an movable property (like shares, jewellery etc.) having market value in excess of Rs. 50,000 or an immovable property having stamp duty value in excess of Rs. 50,000 received without consideration, is taxable in the hands of recipient in the year of receipt.
Though Income Tax Authority states that, any sum of money received on the occasion of marriage of an individual is not to be treated as his/her income. Suppose, if you have deposited money received on the occasion of marriage into bank account. The question arise how will you justify that such amount is received as gift on the occasion of marriage. So, it would be helpful to maintain a digital or manual register of guests and note down the sum of money gifted by relatives. This can be used as a proof to justify that this amount is received as gift.
When an immovable property is transferred as a gift, it is mandatory to execute a gift deed. Other documents such as bank statement or copy of cheque received have also maintained.
Property or money received against will or inheritance is not taxable in hands of recipient, but recipient should have original buyer's agreement and copy of the will which will act as a proof in case any queries.
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