Hi, I want to take a loan from my mother for around 5 lacs. I will be repaying it to her on a monthly basis. I have a few doubts regarding this, 1. Would it be better and easier to take the money and declare it as a gift from mother or is it better to follow any documentation for taking and declaring it as loan. 2. If i take as gift and when i repay her monthly, that amount in her account also should be declared as a gift for her right when filing her income tax? Thanks in advance.
Dear Sir,
Hope you are doing well !!
Gifts from family members are not taxable, neither are the loans (without any interest).
So, there will be no tax liability on you for receiving money from mother as the same will be treated as gift money.
It is advisable that receive the entire amount through banking channel and prepare a gift deed for the same.
-You need to show the gift money under exempt income head while filing your ITR. She doesn't need to show gift given money anywhere in her ITR.
Hello,
1. Yes, you can declare it as a gift from your mother, that would be exempt for you. You need to make a gift deed for the same as compliance for proper documentation and for future reference if the need is there.
2. Yes, your mother will have to declare it as a gift in her income tax return, that would be exempt for her as well.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Hi
If you're going to repay it back to her, it's better to show it as a loan transaction. Reporting of loan depends on what all incomes you have. If you're filing balance sheet with ITR, then it will be declared. Also, if your accounts are audited, it will be reported in form 3CD. But that's fine.
However, if you want to show it as gift, you need to show it in your ITR as exempt income. When you repay it back, your mother shall have to show it in her ITR as exempt income.
Further, it is advisable to prepare gift declaration/ loan agreement in above cases.
Thank you everyone for the response. Have one more doubt since all have mentioned about gift deed. Should the gift deed be registered or any process to follow? Or is it enough if both parties (my mother and me) sign on it?
Preparation of gift deed may involve higher costs. It is advisable to get notarized declarations signed by both the parties for the gift transactions specifying details of the same.
Yes both would be gift and you need to make gift deed for both and no need to declare the same in income tax return.
Yes you need to make gift deed on a stamp paper and notarize it.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
You may make a gift deed on a stamp paper merely stating that such an amount had been gifted by the mother.
Get a simple notarisation.
Make the gift deed on the stamp with notary.
Hello Sir,
1. Yes, it would be better and easier to take the money and declare it as a gift from mother.
2.Yes, when you repay it back, that amount in her account also should be declared as a gift for her right when filing her income tax.
You just need to make gift deed on a stamp paper and notarize it.
We may assist you for the same.