Hello @TeamQuicko
My father wants to gift me some of his money to me. My question is that is this type of transaction taxed under gift tax? And if it is taxed, how much is it taxed? Also, up to what amount of money can be transferred from father to his son in a financial year, so that it is tax free? Meaning up till what amount gift tax is not imposed?
Please help solve this query. Thank You.
Hello @Harsh27
In India, gifts are taxed under Section 56(2)(x) of the Income Tax Act, 1961, but there is an exemption for gifts received from specified relatives, including a father to his son. This means that any amount of money gifted by a father to his son is fully exempt from tax, with no upper limit. However, while the gift itself is not taxable, any income generated from the gifted amount, such as interest, dividends, or capital gains, will be taxable in the hands of the son as per his applicable tax rates.
Thank you @Shreya_Sharma & @TeamQuicko for the response😄
I have one more doubt, so suppose my father transfers the money to me via bank. So do we have to create a gift deed to prove that it was a gift transaction? If yes, how can it be validated? I mean do I have to get the gift deed notarised or registered somewhere?
Please solve this doubt as well @TeamQuicko . Thank You.
Hello @Harsh27
In India, a written gift deed is not mandatory for the valid transfer of movable property, such as money. The transfer is considered complete once you take possession of the gift. However, you can execute a gift deed if you need legal proof of the transfer.
Hope this helps!