During any Financial Year say FY2020-21 if I took say 5 lakh from my parents for some business or for investment or any other purpose. (Parents already paid tax on this money when they earned it through salary few year ago)
At the end of FY if my realized profit is less than exempted income i.e. 2.5 lakh.
Do I need to file Income Tax Return for AY2021-22 (As even though my own realized profit in last FY was less than 2.5lakh but the amount which I had received from mother and father is greater than 2.5 lakh)?
If you receive any amount from Parents out of their taxable income,there is no tax implication on the children. Parents and children falls under the specified list of ‘relatives’ who are exempt under the Income Tax Act as recipients of gift money.
Any gift or amount received from the relatives is exempt from the income tax.
Filing of Income-tax return is mandatory for every person whose income (before considering certain exemptions and deductions) exceed maximum exemption limit, i.e. 2.5Lakhs. With effect from Assessment Year 2020-21, it is also mandatory for every person to file ITR who has done high value transactions.
However, It is advisable to file income tax return for transparent disclosure of the incomes and financial status which will minimize the chances of getting the IT notices.