Your Taxes

Can I give shares worth ₹6 lakh as a gift to my grandson’s wife? What are the conditions under which the gift is taxable and is not? 

Padma Jain

According to the provisions of income tax law, where any property other than immovable property — the aggregate fair market value of which exceeds ₹50,000 — is received without consideration by an individual in any year from any person, the whole value of the aggregate value of such property shall be chargeable to tax under the head, “Income from other sources”. The gift so received by the assessee is not taxed in certain cases as specified in the law, such as if such property is received from any relative or on the occasion of the marriage of the individual, or under a will, or by way of inheritance, etc.

In your case, you may gift shares worth ₹6 lakh to your grandson’s wife without any worry. The gift so received by your grandson’s wife would fall under the definition of a gift received from a relative and hence will not be taxable in her hands.

I was regularly submitting income tax returns and paying whatever tax was due in the past. Ever since I reached the age of 65 and my income fell below the threshold limit, I did not have to pay tax and I stopped submitting returns.

This financial year, 2014-2015, my income has exceeded the limit and I will pay the tax and submit returns. But will the authorities ask for the returns for the years I did not submit the same?

P Ramakrishnan

According to income tax law, filing of income tax returns is a legal obligation of every person whose total income during the previous year exceeds the maximum amount which is not chargeable to income tax under the provisions of law. The return should be furnished in the prescribed form on or before the specified due date.

You may note that for individuals aged 60 years or above, the maximum amount not chargeable to tax is ₹3 lakh for the financial year 2014-15 and ₹2,50,000 for the financial years 2013-14 and 2012-13.

Since your total income was below the prescribed threshold hold limit not chargeable to tax for previous financial years, you were not mandatorily required to file your tax return. In case the tax officer questions the reasons for non-filing of the previous years’ tax returns, you may file a declaration in this regard backed up with necessary documents/details to prove that your total income was below the maximum amount not chargeable to tax.

The writer is a practising chartered accountant. Send your queries to taxtalk@thehindu.co.in

COMMENT NOW