As per the Income Tax Act, 1961 if the value of gifts received is more than Rs. 50,000 a year, then such amount is taxed as income in the hands of the receiver. These gifts may be in any form – cash, jewellery, movable and immovable property, shares etc.

However, this rule is not applicable if your relatives present the gifts. Now just to escape gift tax in India you can’t call a person your relative saying he is the son of my uncle’s neighbour’s vendor’s sister! To avoid scenarios like these, the income tax rules specify relatives from whom tax free gifts can be received. These are:

Parents

Spouse

Your and your spouse’s brothers and sisters

Brothers and sisters of your parents

Your lineal descendants (including spouses)

Lineal descendants (including spouses) of your spouse

So you can receive tax free gift from your brother. Kindly make a deed for the purpose as amount is big this will help you if there is any query from income tax department.

Your brother can transfer Rs 20 lakhs in your account in 4 instalments

2) gift deed for movable property is not mandatory

3) you should declare receipt of Rs 20 lakhs in your income tax returns

4)you will have to pay tax on income earned from Rs 20 lakhs

1) you have to declare the amount received in your income tax returns for different financial years

2) it should be mentioned that it is gift received from brother

3) your understanding is correct . You have to pay tax on interest received on balance amount of Rs 5 lakhs

1. He can gift you the entire amount of Rs.20 lakhs at a time or in as many instalments as he feels like.

2. You should take a notarised affidavit executed by him affirming that he has gifted the said amount to you.

3. You shall have to show the said amount as gift received from your brother for claiming exemption from paying Income Tax.

1. You shall have to declare the amount you received as gift from your brother in a particular year in your I.T return to be filed for that year.

2. It is not your income. you shall have to show it as your bank balance. Collect the notarised affidavit from your brother affirming it as a gift to you as suggested in my earlier post for showing to the I.Tax department if questioned.

3. Any interest earned by you from the said gift amount kept either in whole or in part will be taxable by the I.Tax department.

Yes, there'll be tax implication on the above transfer.

No need of any documentation.

Dear Client,

As per the Income Tax Act, 1961 if the value of gifts received is more than Rs. 50,000 a year, then such amount is taxed as income in the hands of the receiver. These gifts may be in any form – cash, jewellery, movable and immovable property, shares etc.However, this rule is not applicable if your relatives present the gifts.

First question is in affirmative -

In return, it will include as GIFT -

3rd - Affirmative

Transferring money to your account in a span of four to five months is not a bad idea.

Since you have sources of this income established, you can very well bring it to yor book of accounts as income from other sources and show it as gift and pay the IT accordingly.

There is no tax payable for gifts from close relatives.

1. The income received in that particular years of assessment only can be reflected in the ITR of that AY.

2. No doubt gift cannot be taxed as gift from relatives are not taxable, but if it is added to your income as income from other sources and show it as gift from relatives' you can claim exemptions accordingly

3. You may have to pay IT for the income received in that particular AY.

He can transfer the amount but you need to give explanation in your income tax return about the same. You can also execute gift deed for the same.