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Business News/ Money / Q&a/  My father wants to gift cash to me. Should I pay income tax on money received from my father?
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My father wants to gift cash to me. Should I pay income tax on money received from my father?

There are no tax implications of the transaction for either you or your daughter as gifts received from specified relatives including parents are not to be treated as income for income tax purposes given the provisions of Sec 56 of the Income Tax Act

Only when the gift is accepted by the donee either in writing or by action the transaction of the gift be completed.Premium
Only when the gift is accepted by the donee either in writing or by action the transaction of the gift be completed.

I intend to make a gift of 1 lakh to my adult daughter. What will be the tax implications of this gift for me as well as my daughter? Do I need to follow any procedure for making the gifts? Do I need to prepare any gift deed, if yes, what is the stamp duty applicable? Is the gift deed required to be registered?

There are no tax implications of the transaction for either you or your daughter as gifts received from specified relatives including parents are not to be treated as income for income tax purposes given the provisions of Sec 56 of the Income Tax Act.

As far as the procedure to be followed is concerned it is mandatory to prepare a gift deed and get it registered (with related stamp duty) in the case of gifts of immovable properties but the law does not mandate registration of gift deeds of movable property.

For your purposes, all that is required is documentation of an offer by the donor, and acceptance thereof by the recipient will be sufficient. In the document the donor offers the gift and the recipient has to accept the same in writing. The offer and its acceptance need not be on the same document. A communication thanking for the gift will serve the purpose of acceptance of the gift. Only when the gift is accepted by the donee either in writing or by action the transaction of the gift be completed. It is advisable to mention the relationship between the donor and the recipient. Both parties should keep this document on file for ready reference whenever needed in the future.

Balwant Jain is a tax and investment expert and can be reached on jainbalwant@gmail.com and @jainbalwant on social media platform X

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Published: 27 Feb 2024, 01:15 PM IST
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