YOUR REQUESTS: INCOME TAX: No income tax on money received as a gift from your grandmother

Under the Income Tax Act, gifts received from certain “relatives” are not subject to tax. Grandparents are also covered by the definition of specified parents.

By Chirag Nangia

My annual salary is Rs 3 lakh and I received Rs 12 lakh in my grandmother’s bank account as a gift. Do I have to pay taxes on it?
—Pankaj Tyagi

Under the Income Tax Act, gifts received from certain “relatives” are not subject to tax. Grandparents are also covered by the definition of specified parents. Therefore, cash donations received from your grandmother will be fully exempt in your hands.

Under which section are the interests of the public provident fund exempt?
—Rudra

Under section 10 (11) of the Income Tax Act 1961, any payment from a contingency fund to which the Provident Funds Act 1925 applies or from any other provident fund set up by and notified by central government should not be included in a taxpayer’s total income.

Since I lost a lot of money in some stocks, can I offset the loss with the gains I made in the Gold ETF?
—Nilesh Datta

Equity shares are classified as long-term if they are held for a period greater than 12 months. However, the Gold ETF is classified as long term if it is held for a period longer than 36 months. The short term capital loss resulting from the sale of shares can be offset by short / long term capital gains of the Gold ETF. However, the long-term capital loss resulting from the sale of shares can only be offset by long-term capital gains resulting from the sale of Gold ETFs.

Is it mandatory to give the address of the property for which I have taken out a loan and have a tax benefit under Articles 80C and 24?
—Manish Gupta
While no documentary evidence is required to claim investment related tax deductions in the income tax return form, you will need to provide the address of the property for the purposes of claiming the deduction under section 24. In fact , information such as address, ownership, share in the property, type of property (whether freestanding or rented) must be provided when filing income under “home ownership”, in which you can claim a section 24 deduction for interest on borrowed capital. However, the deduction under Section 80C will fall under the Chapter VI A deductions and the same can be claimed without stating the details of the property.

The writer is director, Nangia Andersen India. Send your questions to [email protected]

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