• Tax rebate

Due to his old age , my grandfather wants to distribute his earning amongst his children.
The share to each child is good enough to attract income tax. 
Is there any way to rebate this earning from income tax.?
Asked 7 years ago in Income Tax

Dear Sir,

Gift made by father/grandfather to his son/grandson is exempt from income tax. It is advisable to prepare a gift deed to this effect.

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

Thanks and Regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Gift from grandfather is exempt from tax under sec 56(2) of income tax act

Vidya Jain
CA, Kolkata
1008 Answers
58 Consultations

4.8 on 5.0

Gift from grand father is exempt from tax.

Gfit from any lineal ascendant or descendant is also exempt from tax.

B Vijaya Kumar
CA, Hyderabad
1001 Answers
124 Consultations

5.0 on 5.0

Hi,

Gifts from relative are not taxable. Relative definition as per section 56(2) of income tax-

Relatives means

– Spouse of Individual

– Brother & Sister of Individual

– Brother & Sister of Spouse of Individual

– Brother & Sister of either of the parents of Individual

– Any Lineal ascendants or descendants of the individual

-Any Lineal ascendants or descendants of the spouse of the individual.

Individual can be daughter or son.

As per above definition - Gift from grand father or mother is tax free.

You need to show this income under exempt income while filing the return.

Vishakha Agarwal
CA, Bangalore
448 Answers
85 Consultations

5.0 on 5.0

Hello Sir,

In cases where only the Income is distributed but the asset is kept with the assessee himself, then in such a case the income earned shall automatically be clubbed in his hands, which in your case will be your grandfather.

He will have to distribute/ gift the assets or investments to you all in order to avoid all this.

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

Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

Relative definition as per section 56(2) of income tax-

Relatives means

– Spouse of Individual

– Brother & Sister of Individual

– Brother & Sister of Spouse of Individual

– Brother & Sister of either of the parents of Individual

– Any Lineal ascendants or descendants of the individual

-Any Lineal ascendants or descendants of the spouse of the individual.

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

Thanks and Regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

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