Money received from daughter-in-law based abroad is not taxable.

The provisions of Section 56(2)(x) of the Income Tax Act, 1961 govern the taxation of gifts, which includes money received. In accordance with the said section, any gift received will be taxed in the hands of the recipient provided the quantum exceeds the threshold of ₹50,000.

However, gift, including money, will not be subjected to tax if an individual taxpayer receives such gift from any of his/her relatives as mentioned below:

(A) spouse of the individual;

(B) brother or sister of the individual;

(C) brother or sister of the spouse of the individual;

(D) brother or sister of either of the parents of the individual;

(E) any lineal ascendant or descendant of the individual;

(F) any lineal ascendant or descendant of the spouse of the individual;

(G) spouse of the person referred to in items (B) to (F);

Thus, daughter in law, being a spouse of the lineal ascendant or descendant would be covered under the definition of ‘relative’ as mentioned above and accordingly the money received from her would not be chargeable to tax in the hands of the recipient irrespective of the quantum. The fact that the daughter in law is staying abroad is not relevant for the purpose of determination of taxation of gift in the hands of the recipient.

Query answered by Dr Suresh Surana, founder, RSM India. Send queries at [email protected] to get them answered from experts.