Never filed ITR

Dear Sir,

No, your wife's cousin (her mother's sister's son) is not her relative for section 56.

So your wife's brother and sister can send money to your wife regularly. If her cousin send any money to her, it will be taxable in your wife's hand. It is advisable to prepare a gift deed Everytime you receive money to avoid any future tax complications.

Your wife has to disclose this gift in ITR as an exempt income.

Please feel free to call/ revert in case of any doubts

Thanks and Regards

Abhishek Dugar

CA CS B.Com

Dear Sir,

- He is not blood relative

- You can maximum get $ 2,50,000/- during a year as gift as per FEMA Guidelines.

Under income tax if they will gift you it will be straight away taxed in the had of your wife.

Also whenever you are planning a gift transaction it is must to ensure that you enter in proper gift deed.

Hi,

Here the “relatives” term defines by the Income Tax act as follows :

Spouse of the individual

Brother or sister of the individual

Brother or sister of the spouse of the individual

Brother or sister of either of the parents of the individual

Any lineal ascendant or descendant of the individual

Any lineal ascendant or descendant of the spouse of the individual, Spouse of the person referred to in clauses (ii) to (vi).

So, if your wife is receiving money from her parents brother and sister or her real brother and sister then it is exempt.

but money received from cousin is not considered as gift and is taxable if the amount exceed Rs50000 in any financial year.

To avoid paying taxes on gift received your wife's cousin can transfer the money to their parents account then they can gift money to your wife. (cousin parents should be real brother and/ or sister of your wife's parent)

Hello Sir,

You wife's brother and sister can transfer her money which will be exempt under the Income Tax Act. But in case of money received from her cousin any amount of money received over Rs.50,000/- shall be subject to tax. So in case her cousin transfers Rs.50,001/- the entire amount shall be taxed in India.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Gifts from specified relatives are not taxed.

Your wife receiving gifts from her brother and sister are from specified relatives and hence not taxed. Gift from mother's sister's son is not a specified relative under Explanation (e) to Section 56(2)(vii) of the Income Tax Act.