As per the Income Tax Act, 1961 if the value of gifts received is more than `50,000 a year, then such amount is taxed as income in the hands of the receiver. These gifts may be in any form—cash, jewellery, movable and immovable property, shares, etc.
On retirement, I received monetary gifts (cash, drafts and shopping vouchers) of Rs 5 lakh from colleagues. Do I have to pay tax on the amount? —Anuj Madhwal
As per the Income Tax Act, 1961 if the value of gifts received is more than Rs 50,000 a year, then such amount is taxed as income in the hands of the receiver. These gifts may be in any form—cash, jewellery, movable and immovable property, shares, etc. However, this rule is not applicable if your relatives present the gifts. Also, the gifts can be exempt even if they aren’t received from these relatives, if they are received during your marriage. Hence, the gifts from your colleagues on your retirement is liable to tax in your hands.
My wife works part-time and earns around Rs 2.5 lakh a year. Will she have to file ITR for the amount? —Deepak Sardana
An individual is liable to file return of income if the income is more than the basic amount not liable to tax, i.e., Rs 2,50,000. If your wife’s income is within the basic exemption limit, she shall not be liable to file the return of income.
I received Rs 50,000 as interest from bank deposits (three fixed deposits from two banks) in March this year. Both the banks did not deduct any TDS. Will I have to pay tax on the amount as it will not be reflected in Form 26AS? —Gopal Iyer
TDS is just a mechanism of collecting tax and is not the determining factor for taxability or otherwise of an income. Even if the bank has not deducted TDS while making payment of interest to you, you are liable to include the same in your income while computing the tax payable for the year under consideration. However, if the interest is on savings bank account, you are eligible to claim deduction up to Rs 10,000 under Section 80TTA.
My wife inherited a property from her mother a year ago. Will she have to pay any tax on it and how will the property registration be done? —Anil Gupta
There is no taxability at the stage of inheriting the property. However, if your wife sells the inherited house, she shall be liable to pay capital gain tax on the gains made on sale of the said property. While computing such capital gains, the cost of acquisition to be considered shall be that in the hands of her parents.
The writer is partner, Nangia & Co LLP. Send your queries to firstname.lastname@example.org