Is the quantity gifted by your partner taxable?

I’ve an revenue of 12 lakh each year, moreover bonuses. My husband offers me 90,000 per 30 days. Will this quantity be taxable in my account? If my husband reduces this quantity to 50,000, will that cut back my tax legal responsibility?

—Identify withheld on request

As per the provisions of the Revenue-tax Act, any sum of cash or worth of property acquired from ‘relative’ just isn’t thought of as taxable each within the palms of the donor and the recipient. The definition of the phrase ‘relative’ for the mentioned goal consists of partner of the person. Thus, any sum of cash acquired by you out of your husband shall not be taxable for both you or your husband.

It might, nonetheless, be famous that as per the provisions of Part 64 of the Act, any revenue that arises to the recipient partner from property gifted by the donor partner, could must be clubbed with the revenue of the donor partner, therefore these provisions may additionally be examined individually.

I’ve a provident fund (PF) account for greater than 5 years. Is withdrawal of an quantity above 50,000 from this account be taxable?

—Sajeed Turki

As per provisions of part 192A of the Revenue-tax Act, tax is required to be deducted at supply upon withdrawal of amassed stability because of an worker who has participated in a recognised worker provident fund (EPF), supplied such withdrawal just isn’t exempt from tax as per the prescribed provisions and the combination quantity withdrawn is 50,000 or extra.

Additional, as per provisions of part 10(12) learn with rule 8 of half A of the fourth schedule of the Act, stability to the worker’s credit score on the date of cessation of employment, is exempt from tax, if the worker has rendered steady service together with his employer for a interval of 5 years or extra.

It’s assumed hat you’ve got rendered steady companies for a interval of 5 years or extra along with your employers (to whom the Workers Provident Fund and Miscellaneous Provisions Act, 1952 applies) and have contributed in direction of recognised EPF for a steady interval of 5 years or extra. Thus, the quantity so withdrawn can be exempt from tax to the extent mentioned above and no TDS, or tax deducted at supply, ought to apply on the identical.

Please individually be aware that any curiosity accrued from date of cessation of employment up to now of withdrawal would, nonetheless, be taxable. Additionally, any accumulations and curiosity thereon to the extent it pertains to employer contribution in extra of 7.5 lakh each year or curiosity accrued to the extent it pertains to worker contributions in extra of 2.5 lakh each year continues to be taxable.

Parizad Sirwalla is accomplice and head, world mobility companies, tax, KPMG in India.

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