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No tax on gift to in-laws

Q. I am a doctor by profession. I want to gift my sister-in-law, who is also a doctor, a sum of Rs 3 lakh per annum. What shall be our tax liabilities as we both are income taxpayers?

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SC Vasudeva

Q. I am a doctor by profession. I want to gift my sister-in-law, who is also a doctor, a sum of Rs 3 lakh per annum. What shall be our tax liabilities as we both are income taxpayers? — Manohar Lal Bansal

A. No tax liability would arise on the amount of gift given to your sister-in-law as the same will not attract any tax in the hands of your sister-in-law being sister of your spouse.  This is in accordance with the definition of the term ‘relative’ contained in Section 56 of the Act.

Q. In addition to deducting TDS @ 10% on my pension, my bank is insisting on deducting income tax based on my total pension during 2017-18, which adds up to more than Rs 10 lakh. Is this  stipulated by any specific provision of the Income Tax Act? I regularly pay tax on my pension plus other income. How can the bank take on the function of an ITO and that too based on only part income? Kindly advise the precise legal position and what remedy I have. I am a Central government pensioner and draw my pension through one of the nationalised banks. — SN Kakar

A. According to the provisions of Income-tax 1961 (The Act), a bank is required to deduct tax at the appropriate rate in respect of the pension payable to an individual assessee. This should not cause any hardship to you as the amount of tax deducted at source by the bank would be adjustable against the tax payable on your total income including pension. Non-deduction of tax at source by the bank invokes penal provisions of the Act and therefore the bank would not like to take any chance in this regard.

Q. I have a married daughter (having private dental clinic) and a son (unmarried) who is a government employee. Both of them pay tax and file return.  I am a pensioner and also get family pension of my husband who expired while serving the Punjab Government in 2006. Can that family pension be divided equally in three parts for taxation? — Aruna Kumari

A. The amount of family pension received by you should be taxable in the hands of the legal heirs of your husband. According to the provisions of the Hindu Succession Act, 1956, yourself and your son and daughter are legal heirs and therefore, the family pension should be taxable in the hands of the three legal heirs, each one of them being entitled to 1/3rd of your husband’s estate.

(Readers can send their queries at delhi@scvindia.com)

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