Income Tax: Tax burden increases even after giving a gift, know in which situations tax has to be paid..
Do you know that you have to pay tax on gifts also? Maybe you know exactly. Gift tax is levied in India. But do you know that when you give a gift to someone, tax liability still applies to you? That is, tax has to be paid on receiving a gift, but tax is also levied on giving a gift. But in what situation? Let us understand.
Under what circumstances is tax payable on gift giving?
When you talk about gifts, it is not necessary that we talk about any small gift, cash, or anything like that. A gift can also mean a monetary or asset transfer to someone. In such a situation, it is especially important for you to know the tax rules.
If you are paying the rent to someone else?
For example, suppose you have given one of your houses on rent and the rent received from it goes directly to one of your relatives. You can see it as a gift given to that relative, but you will have to pay tax on it because according to tax rules, that rent is your income. It will first be considered as your income and then it will be seen as a gift, in this case, it will be counted as tax on you.
Tax liability on behalf of a child on the parents
Apart from this, a situation can happen that the parents have opened a bank account in the name of their minor child and are depositing money in it, if this happens then it is going as a gift for the child and from the income of the parents, but The interest earned on the money deposited in that bank account will also be added to the income of the parents. And there will be a tax on it.
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