Up to what amount can parents make gifts to their children, and how many times in a year?
Parents can make a gift of any amount to their children without any limit or number of times. Please note that though there is no upper monetary limit up to which parents can make a gift to their children, one cannot receive a single gift of more than two lakh rupees at a time in cash. Please note that in case the gift is made to a minor and your purpose is to reduce your tax liability, it will not serve your purpose because the income of a minor from all the passive sources is required to be clubbed with the income of the parent with higher income.
My father had a savings account in a bank with me as the second holder. He passed away on 23 Apr 25. Since I was a joint holder on the closure of my father's bank account, the balance amount got transferred to me. Please tell me what my tax liability will be for such an amount and where I need to show the said amount in my ITR FY 25-26.
Section 56(2) of the Income Tax provides that if the aggregate value of all the gifts, whether in cash or in kind, during a year, exceeds fifty thousand rupees, the same shall be taxed in the hands of the recipient. This rule is subject to certain exceptions, like gifts received from specified relatives or assets received either under a Will or as inheritance under the personal law. Since there is no inheritance tax here in India, the money received by you on the death of your father is not to be treated as your income and is tax-free in your hands without any limit.
Please note that the other legal heirs may ask you to give them their share of the money received by you, in case there are other legal heirs entitled to inherit from your father if he died without leaving a valid Will. However, in case your father had bequeathed this amount to you under a valid Will, you are not accountable to other heirs.
Since the money received by you as a legal heir is not income, you are not required to disclose it in the ITR to be filed by you. However, if you wish, you can disclose this under the schedule EI of exempt income.
After completing 4 years and 4 months in service, I have decided to do something on my own and withdraw the full amount from my EPF Account. I understand that for the withdrawal of EPF balance to be tax-exempt, one has to complete 5 years of service. Are there any option/declaration forms for a person who is no longer looking to do a job? Or is it that such a person will have to pay the tax?
As far as the taxability of the money accumulated in your provident fund account is concerned, it becomes taxable if you have not completed five years of service during which contributions for at least five years have been made in the account as per income tax rules. The withdrawal before the stipulated period of five years of contributory service is exempt only in very exceptional circumstances, like a job terminated due to his ill health, or due to closure or discontinuance of the business of the employer or any reason beyond the control of the employee. As your case is not covered under these exceptions and since you have not completed five years, whatever money you withdraw, along with the interest, will become taxable in your hands.
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