A is 75 years. He transfers his shares to his brother B who is 83 years. If B sells the shares, upto Rs.5 lakhs does he gets exemption of tax on short terms capital gains as applicable for a very senior citizen above 80 years? If B gifts his funds at any time to his nephew, ie. brother's son or back to his brother, does any income tax come into play?
In Income Tax parlance, brother to brother is considered 'relative' . What about nephew to his uncle (father's brother) and vice versa?
Hi
1. Yes, there will not be any tax for B.
2. If B transfer the fund to his brother or his real nephew, then also it will be treated as gift in the hands of receiver and will be exempt from taxes.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Hi,
There will be no tax liability if the shares are gifted to the nephew as gifts amongst relatives are not subject to tax.
Regards,
Nikhil.
Under what secion of I.T.Act gift from Uncle to his real nephew (brother's son) is treated as relative being exempted from tax ? What is lineal ascendency and descendency? Does it cover Uncle nephew and vice versa? Appreciate clarification. Thanks.
Under Income Tax Act, 1961 any Gifts received in Monetary/non monetary form from relatives by an individual/HUF will not be charged to tax.
Relatives means
a. Spouse of the individual
b. Brother or sister of the individual
c. Brother or sister of the spouse of the individual
d. Brother or sister of either of the parents of the individual
e. Any lineal ascendant or descendent of the individual
f. Any lineal ascendant or descendent of the spouse of the individual
g. Spouse of the persons referred to in (b) to (f).
As per this gift received by a nephew from uncle is not chargeable to tax.
Yes the lineal ascendant and descendent covers nephews as well.
Regards,
Nikhil.
.
Please refer section? 56 of the income tax act.
Gift by uncle to nephew is exempt. Gift by nephew to uncle is not exempt.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Dear Sir,
Gift from A (bother) to B (brother) is exempt in the hands of B by virtue of section 56(2)(x) of the Act.
STCG will be exempt for B if he does not have other income. If he is having other income then exemption would be reduced upto the amount of other income.
Gift by nephew to fathers brother is exempt but vice-versa is taxable.
Gift from B to A will again be exempt.
Gift from brother to brother is not taxable.further gift transaction from B to his nephew is also tax free.
Refer sec 56 of Income tax Act
