look news india
Income Tax Rules: The Mumbai bench of ITAT (Income Tax Appellate Tribunal) has given an important decision in a case related to income tax. It has been said that the amount of Rs 20 lakh received from an NRI brother living abroad will not be taxed. This decision given by this institution of the Income Tax Department emphasizes that Indian tax laws exempt some taxpayers from tax on gifts received from their relatives. However, till now under the Income Tax Act, a gift of more than Rs 50,000 received from a relative is considered 'income from other sources' and tax is deducted on it as per the prescribed rates of income tax applicable on it. But, in many cases it is exempted from tax. These include gifts received from close relatives, gifts received at weddings and inherited property.
What does the tax law say?
Section 56 (2) (x) of the Income Tax Act provides for tax exemption on gifts received from a brother. The Income Tax Appellate Tribunal gave this decision in the case of a person named Salam, who had received a gift from his brother. But, the Income Tax Department officer had initially considered this gift as taxable income. In this case, the Income Tax Commissioner also upheld the officer's decision and said that the taxpayer failed to prove that he had received this money as a gift from his brother.
The petitioner approached the ITAT regarding this matter, where Salam proved with evidence that his brother has been living in Dubai for 25 years and doing business there. The amount of Rs 20 lakh received from him has been sent to him as a lovely gift.
