No tax on gift from relative

Q. Please let me know whether one can receive gift from his married daughter or son-in-law without paying any gift tax and up to what limit. Also will there be any liability on the part of receiver?

— Amba Pershad

A. In accordance with the provisions of Section 56 of the Act, any sum of money the aggregate value of which exceeds Rs 50,000 received from any relative is not chargeable to income-tax. The term ‘relative’ as defined under the said section includes any lineal ascendant or descendant of the individual as well as the spouse of such lineal ascendant or descendant. Accordingly, such gifts, if any, received by the donee from her daughter as well as from his son-in-law, would not be chargeable to income-tax. It may be added that there is no gift tax leviable on gifts as the Gift-tax Act 1958 is not in force. 

Q. My father made a registered will in 1979 and registered codicil in 1987, bequeathing his self-acquired house to one son and one daughter out of three sons and three daughters. He expired in the year 2001. In the will property was bequeathed to one son and in codicil property was bequeathed to one son and one daughter 50% each.

One of the eldest son pre-deceased the death of the father and his son challenged the will in court on the plea that it is HUF property and will is forged for which he has no documentary evidence. 

We were not able to produce attesting witness as all of them were advocates and are not traceable now, as most of them have expired. But record of sub-registrar where will and codicil were registered was produced in the court. However, during cross-examination of the plaintiff, he has admitted due execution of the will and has identified the signatures of the testator and said that will is OK. Court’s decision — Civil Judge (Senior Division)

In spite of all these, the court did not accept the will on the ground that we did not produce any attesting witness and the court did not accept our plea that will is 30 years old document and has awarded 1/6th share to plaintiff. What remedy is available now?

— Deepak Bharti

A. The only alternative available with you is to contest the order of the Civil Judge (Senior Division) with a higher Appellate Authority. The judge does not seem to have appreciated the fact that the will and codicil were registered as and when executed and that the fact that the genuineness of the will has been accepted by the plaintiff. The appellate authority should be appreciative of the facts which have been explained in the query and therefore, you should be able to get the desired relief at the appellate level. 

Q.I am in receipt of Rs 6,95,000 in the FY 2016-17 in which salary part is Rs 6,50,000, bank FD interest Rs 45,000 and arrears for the previous FY is Rs 26,000. I also made an investment of Rs 1,50,000 u/s 80C. If I calculate the receipt for this FY, it comes out to be Rs 4,93,000 (Rs 5,19,000 minus Rs 26,000). Please clarify whether I am eligible for the rebate of Rs 5,000 u/s 87A for this year.

— Mohinder Sharma

A. Rebate of Income-tax under Section 87A of the Income-tax Act 1961 (The Act) is allowable to an assessee being an individual resident in India whose total income does not exceed Rs 5 lakh.  The limit of Rs 5 lakh is applicable for assessment year 2017-18 i.e. for financial year 2016-17. Your total income according to the calculations given by you would exceed Rs 5 lakh, including the arrears of salary. You would, therefore, not be entitled to a rebate of income-tax as allowable under the aforesaid section.