I am a NRI in Dubai. I intending gifting Rs.8,00,000/- to my own sister (Pensioner and files IT returns regularly wih NIL Tax) who lives in chennai Tamil Nadu by way of transfer to her account. She has a son(Major) who is on the verge of becoming IT assessee. 1) I would prefer transferring to her son considering my sister considering the age factor, which is better? 2) Is there any gift tax involved? Does it change if i gift it to my sister? 3) Is there any gift deed to be executed and registered before gifting or what is the time line? 4) I am in dubai and I would be travelling later part of the year. Can I execute the deed later as I would like to gift them by June I week.
Dear Sir,
1. You can gift the money to your daughter's son. No issues.
2.No gift tax involved.
3. It's always better to execute a gift deed. If you can't execute registered gift deed at least have it documented on the stamp paper. (We can help you in drafting gift deed)
Please note that recepient of gift need to show the amount in ITR.
Please feel free to call/revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Gift from brother to sister is exempt under income tax act. So it is advisable to gift her instead of her son and execute the gift deed. There is no gift tax involved
Hello,
1. Yes, you can gift it to your sisters son. (Assuming you have a blood relation with her)
2. No, Gift tax involved.
3. Yes, it is preferable to execute a Gift Deed.
4. You can get it done when you arrive in India and transfer the funds in June, not a problem.
Regards
Keerthiga Padmanabhan
M.Com., CA, LLB
Hello,
1. You can very well transfer the funds directly to your sister's son, without any tax implications. (Considering you share a blood relation with your sister).
2. No Gift Tax is involved, it is entirely tax free.
3. Yes, it is preferable to enter into a gift deed but is not mandatory.
4. Surely you can transfer the funds first then make a gift deed when you come to India, it is not a problem at all.
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
You can transfer to her son also. That will be exempt.
You can execute a Gift Deed and it is not mandatory to register the same. You can give gift deed when you come to India also.
1) Gift to your sister is exempt but to gift to her son is not exempt and is taxable in his hands as income from other sources u/s 56(2)(x) of the Income Tax Act. So it is advisable to transfer the money to your sister's account.
If your sister is not able to operate her bank account considering the age factor, you may transfer the money to her son's account with a specific direction to the effect that the money was intended to be a gift to your sister and he should hold the money in trust for her. You need adequate factual documentary evidences to support this.
2) There is no gift tax now but the gift will be treated as income in the hands of your sister's son and taxed at the rates applicable to him. In the case of your sister, it is an exempt income and not taxable.
3) It is not mandatory to have formal gift deed for moveable assets like money transfers but it will be still advisable to have documentary evidence by way of even email.
4) You may execute the gift deed when you are in Chennai to ratify your gift but still ensure that you have atleast email evidence to show that it was a gift to your sister. Even in the documents to be submitted to the bank for the transfer of money, be sure to mention that it is a gift.
