BUSINESS

YOUR QUERIES: INCOME TAX : No income tax on money received as gift from your grandmother

Under the Income Tax Act, gifts received from specific “relatives” are not subject to taxation. Grandparents are also covered within the definition of specified relatives.

By Chirag Nangia

My annual salary is Rs 3 lakh and I have received Rs 12 lakh amount in bank account from my grandma as a gift. Do I  have to pay tax on it?
—Pankaj Tyagi

Under the Income Tax Act, gifts received from specific “relatives” are not subject to taxation. Grandparents are also covered within the definition of specified relatives. Hence, cash gift received from your grand-mother will be fully exempt in your hands.

Under which section is interest on Public Provident Fund exempted?
—Rudra

Under section 10(11) of the Income Tax Act, 1961 any payment from a provident fund to which the Provident Funds Act, 1925 applies or from any other provident fund set up by the Central Government and notified by it shall not be included in total income of a taxpayer.

As I have lost a lot of money in some stocks, can I offset the loss with the gains that I have made in Gold ETF?
—Nilesh Datta

Equity shares are classified as long term if they are held for a period more than 12 months. However, Gold ETF is classified as long term if it is held for a period more than 36 months. Short term capital loss from sale of shares can be set off against short/ long term capital gains from gold ETF. However, long term capital loss from sale of shares can only be set off against long term capital gains from sale of Gold ETF.

Is it mandatory to give the address of property for which I have taken a loan and am availing tax benefit under Sections 80C and 24?
—Manish Gupta
While no documentary evidence is required for claiming investment-linked tax deductions in the income tax return form, you shall be required to furnish the address of the property for the purpose of claiming deduction under Section 24. In fact, particulars like address, ownership, share in property, type of property (whether self-occupied or let-out) have to be furnished while declaring income under head ‘house property’, wherein you can claim deduction under Section 24 in respect of interest on borrowed capital. However, deduction under Section 80C will fall under chapter VI A deductions and the same can be claimed without declaring any particulars of the property.

The writer is director, Nangia Andersen India. Send your queries to [email protected]

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