New Delhi: From now on, when you get 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 as your kin.
The Central Board of Direct Taxes (CBDT) has recently ruled that any "gift-in-kind" exceeding Rs 50,000 would be taxable at the hands of the donee `except` from relatives or given during occasions like marriage or by way of inheritance of the donee.
"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 the exemption under the new
arrangement, the income tax assessment officer can have an
on-spot verification without any delay," a senior I-T official
An individual can preferably get one affidavit listing
all such gifts in the entire assessment year from different or
the same relative. The individual will hence reduce the
trouble of preparing an affidavit each time he receives a
gift, the official said.
During the assessment of the I-T returns, the affidavit
will save you from the hassles of proving the gift, both
movable and immovable, being received or inherited from any
relative residing in any part of the world. It will also
establish the donee`s relationship with the donor, the officer
The CBDT had 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 person
who is a relative, on the occasion of marriage of the
individual (donee), under a will or by way of inheritance, in
contemplation of death of the donor, from any local authority
as defined in the explanation to Section 10(20) of the Act,
from any fund or trust established under Section 10(23C) of
the Act and from any trust or institution registered under
Section 12AA of the Act, it said.
Assesses will have to file income tax dues on the value
of the gift and disclose the taxable value of such property in
the return of income for assessment year 2010-11.
Under the I-T Act, 1961, a relative is defined as,
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.