During the FY2020-21, my net income excluding the monetary gift received from parents is below exemption limit (2.5 Lakh). But the amount of (Gift from Relatives + My Own Income) is greater than 2.5 Lakh.
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Do I need to file ITR for this Year i.e. FY2020-21 (AY 2021-22)? I mean is it mandatory for me?
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If YES, then where in the ITR3 I must show the Monetary GIft received from the relative/s (Parents in my case)?
The Monetary GIft received from relatives is exempt under Income Tax rules. So do I need to show this amount in my ITR? If yes, then in which Schedule and if possible under what head or section of this form?
I read this article here which said the following…
We are clear that gift received from relatives or from person or on occasion mentioned in 56(2)(x) are not liable to tax and also not covered under Income from other sources. Hence one cannot show it under the head or schedule of income from other sources.
Hence many people tends to show it under exempt income schedule which practically is not incorrect as the income is not liable to tax but legally such receipt is not exempt income as same is not covered under section 10 and all income which is not liable to tax is not exempt income.
Gift is just a capital receipt which is not required to be disclosed in Income tax return like amount received on sale of rural agricultural land or amount received on sale of personal asset which are not covered under the definition of capital asset like amount received on sale of personal car.
As we don’t show such amount in Income tax return likewise we are not required to show such gift received which is not liable to tax in our Income tax return.
Thus, from the above discussion it is clear that one is not required to show receipt of gift in Income tax return which is not liable to tax.