Friday, 7 September 2012

Marriage gifts- Exempt only when received directly in the account of bride or bridegroom

When the father of the bride received certain cheques marriage gifts in his account he was held liable to pay tax on the same in Rajinder Mohan Lal v. Dy. CIT (2012) 75DTR Trib 85 despite exemption under the Act.

By the ratio of this decision from the Chandigarh Tribunal to get an exemption it is thus desirable to have such gifts directly in the name of the bride or bridegroom, as the case may be and in case they are received otherwise it may be advisable to get the same in their names only to avoid any tax implications.

In this case the father who received certain USD cheques in his account did not even transfer them to her daughter’s account. Further even if he would have so transferred it may not have served much purpose for the interpretation held by the bench of the term ‘individual’ in the exemption proviso clause (b) to s. 56 (2) (vi) to be only the bride or the bridegroom.

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