Do you have inherited money from your father?. If the answer is “Yes”, do you know the income tax laws related the mentioned transactions. This transaction would fall under the category of gift received from relatives. In my earlier post I have answered a question about the gift from mother. This case also the same as receiving gift from mother with little difference.
Under section 56 of the Income-tax Act, any money received by an individual from a person during any fiscal year (FY) without consideration, the aggregate value of which exceeds Rs.50,000, is taxable under the head “income from other sources”. However, the exemption will be available if the money is received from the relatives. In this case, if you receive lump sum amount from father (whether he gifted or inherited, income tax laws treated both in same way), it is fully exempt from the tax.
- Income Tax Exemption and Rules on Gifts as Income of Source
- Income Tax for non-cash gifts effective from October 1, 2009
- NRI status for Gift Tax
But, keep in mind that only the money what you have received is not taxable. If you deposit that money in the bank account, whatever interest received for that money would be taxable on your hands.
I hope this post would have given you good idea on the gift from your close relatives whether it is gifted or inherited. If you receive any favor from your father for very huge amount, it is advised to have the gift deeds to avoid any future income tax problems. If you have any questions on the gift taxes, please post it in the comments section. If you want to receive future articles from me, please subscribe here.