MUMBAI: In a major ruling, the Revenue-Tax Appellate Tribunal’s (ITAT) Mumbai bench has held {that a} present of Rs 20 lakh obtained by a taxpayer from his non-resident brother, primarily based within the UAE, shouldn’t be topic to tax.
This judgement underscores that Indian tax legal guidelines exempt sure items from being taxed, significantly these obtained from shut relations.
Beneath the Revenue-Tax Act, items exceeding Rs 50,000 are typically taxed as ‘earnings from different sources’ on the relevant slab fee, within the fingers of the recipient.
Nonetheless, there are a number of exemptions that do exist: Presents obtained from relations, on the event of marriage, or via a will or inheritance usually are not taxed.
Beneath the Part 56 (2)(x) of the I-T Act, items from a brother fall underneath the exempted class.
The case concerned A Salam, who obtained the substantial present from his brother. Nonetheless, the income-tax (I-T) officer initially labeled the present as taxable earnings.
The earnings tax commissioner of appeals supported this determination, arguing on the bottom that the taxpayer did not convincingly show the donor’s creditworthiness and the genuineness of the present. Consequently,
A Salam filed an enchantment with the ITAT.
In his defence, recipient of the present A Salam supplied full proof that his brother, a long-term resident of Dubai who was engaged in enterprise there for over 25 years, made the present out of ‘pure love and affection’.
He mentioned that the quantity by his brother was then transferred via three cheques from the Financial institution of Baroda and ICICI Financial institution.
He additionally submitted his brother’s financial institution statements, passport, and investor class visa to determine his identification and monetary capability.
A present deed dated August 26, 2022, was additionally supplied to help the legitimacy of the present that had been given now.
ITAT member Prashant Maharishi, who presided over the case, along with taking cognisance of the proof produced, additionally famous that the parental names of the donor and recipient matched.
This clearly established that the 2 males are actual brothers. Maharishi additionally concluded that the Rs 20 lakh obtained by A Salam shouldn’t be labeled as a taxable earnings and directed the earnings tax official to delete the addition made.
This judgement underscores that Indian tax legal guidelines exempt sure items from being taxed, significantly these obtained from shut relations.
Beneath the Revenue-Tax Act, items exceeding Rs 50,000 are typically taxed as ‘earnings from different sources’ on the relevant slab fee, within the fingers of the recipient.
Nonetheless, there are a number of exemptions that do exist: Presents obtained from relations, on the event of marriage, or via a will or inheritance usually are not taxed.
Beneath the Part 56 (2)(x) of the I-T Act, items from a brother fall underneath the exempted class.
The case concerned A Salam, who obtained the substantial present from his brother. Nonetheless, the income-tax (I-T) officer initially labeled the present as taxable earnings.
The earnings tax commissioner of appeals supported this determination, arguing on the bottom that the taxpayer did not convincingly show the donor’s creditworthiness and the genuineness of the present. Consequently,
A Salam filed an enchantment with the ITAT.
In his defence, recipient of the present A Salam supplied full proof that his brother, a long-term resident of Dubai who was engaged in enterprise there for over 25 years, made the present out of ‘pure love and affection’.
He mentioned that the quantity by his brother was then transferred via three cheques from the Financial institution of Baroda and ICICI Financial institution.
He additionally submitted his brother’s financial institution statements, passport, and investor class visa to determine his identification and monetary capability.
A present deed dated August 26, 2022, was additionally supplied to help the legitimacy of the present that had been given now.
ITAT member Prashant Maharishi, who presided over the case, along with taking cognisance of the proof produced, additionally famous that the parental names of the donor and recipient matched.
This clearly established that the 2 males are actual brothers. Maharishi additionally concluded that the Rs 20 lakh obtained by A Salam shouldn’t be labeled as a taxable earnings and directed the earnings tax official to delete the addition made.
