Hi
Gifts on account of marriage is exempt from tax. Show it as Exempt income in ITR.
Use purpose code P1302.
Wedding gift received from American citizen
Dear All I recently got married and my father's cousin brother who is an American citizen has transferred US $5000 to me as wedding gift to my bank account. For the transaction to go through i need to provide my bank with a purpose code for the money coming through. Now I could not find any option in the RBI purpose code list that says wedding gift and also the gift option that is there in the list is only applicable in case of blood relatives which he is not. So need suggestions on what purpose code to provide to my bank and further how to show this as non taxable income as this is a wedding gift. Thanks
Asked 5 years ago in Income Tax
Hi Lakshita Using P1302 is incorrect as per bank officials as father's cousin brother is not a relationship that is recognised under this purpose code. It's only applicable in case of father, mother, spouse, brother, sister, lineal ascendents and descendents etc. Does what purpose code I give them really matter as long as I show this amount as exempt income in ITR on account of funds received as wedding gift? Like if i use a purpose code that i usually use when i receive funds from foreign clients. Will that work?
Asked 5 years ago
You can use P0018 as it is a capital account transactions and not an income.
In that case, opt for P0018.
Yes, purpose code reported should be in line with your incomes reported in ITR. Or else, some query may come up in future.
Hello,
Gift received on the occasion of the marriage of the assessee is exempt under the Incom Tax Law.
P0018 appears to be the correct code for this transaction.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Even though the income is exempt in the hands of the assessee, correct code should be used to avoid any issue in the future.
You must show it as capital receipt and as such purpose code wouldn't be much important in income tax but since the amount is huge they might inquire and at that time this purpose code would be helpful.
Also get a statement from your uncle that he had sent you this amount as a gift on marriage because gift received on marriage is fully exempt.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
Dear Sir,
Hope you are doing well !!
Gifts received on the wedding regardless of their value are exempt from taxation.
You need to show the same under code P0018 as it is a capital receipts.
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