Is gift given to father in law in form of shares/liquid funds is taxable in hands of father in law?
No. But accurately speaking, clubbing provisions could apply, and so in the future, CG (and dividends too I think) from such gift will have to be clubbed with your income.
Hi @MOHIT_AGRAWAL,
Gift of movable property such as shares, ETFs, mutual funds, jewellery, drawings etc without consideration and exceeding Fair Market Value of more than INR 50,000 is taxable in the hands of the recipient under Section 56(2) of the Income Tax Act. Such income should be reported under the head ‘Income from Other Sources’ in the Income Tax Return and tax should be paid at slab rates.
Taxes on the gifting of shares are exempt in certain situations.
Sale of shares, ETFs, mutual funds, etc received as a gift would be taxable under the head Income from Capital Gains.
@Quicko arent gifts between immediate relatives (parents, spouse) tax free for the receiver - and only the proceeds from investing them to be clubbed with the gifter?
Gifts received from relatives are exempt from tax. by virtue of Section 56 of the Income Tax Act. According to the IT Act, following persons would be considered as relative –spouse, brother or sister, brother or sister of the spouse, brother or sister of either of the parents, any lineal ascendant or descendent, any lineal ascendant or descendent of the spouse, spouse of the persons referred above.
Hi @Vij
Shares & Securities received from a relative is exempt income since gift from a relative is exempt as per Sec 56(2)(vii) and Father-in-Law is covered under the definition of relatives.
Moreover, Only if the receiver of the gifted asset is a spouse or minor child, any income that arises directly or indirectly from such asset is clubbed with the income of the sender as per Section 64(1)(iv) & Section 64(1A) of the Income Tax Act.