“According to Section 56(2)(vii) of the Income-Tax Act, gifts received from relatives are not taxable. The specified list of relatives includes grandparents and grandchildren as well. ”
I am an 82-year-old pensioner and I gift Rs 12,000 every month to my granddaughter. Will this sum be taxable? Are we required to show this in our tax returns?
Amit Maheshwari, Partner, Ashok Maheshwary and Associates says, “The money that you have been transferring to your granddaughter will not be taxable in her hands. According to Section 56(2)(vii) of the Income-Tax Act, gifts received from relatives are not taxable. The specified list of relatives includes grandparents and grandchildren as well. Also, neither of you not need to furnish the gift details when filing your tax returns. In fact, the income tax return forms don’t have a head specific for disclosing gifts received from relatives.”
I just sold a plot of land, which I had purchased two years ago, and made a profit. What will be my tax liability?
Ashok Shah, Partner, N.A. Shah Associates, “You will be liable to pay long-term capital gain tax at 20% plus the surcharge and cess. Capital gain is computed by reducing the indexed cost of acquisition of the plot from its sale price. You should multiply the purchase cost by 1.0606 to arrive at the indexed cost of acquisition. If your total taxable income is less than Rs 2.5 lakh, you can adjust the difference against the capital gains and pay tax just on the balance amount.”
My parents are not covered by a health insurance policy and I pay for their medical expenses and checkups. Can I claim tax deduction towards these expenses?
Shubham Agrawal, Senior Taxation Advisor, TaxFile.in says, “You can claim expenditure of up to Rs 5,000 per year on preventive health checkups of your parents. Additionally, medical expense of up to Rs 30,000 can be claimed, if your parents are very senior citizens-not less than 80 years old. However, if the expenditure is on the treatment of critical diseases, specified under Section 80DDB, you can claim tax deduction irrespective of the age your parents.”
Source : Economic times