In case of Exempt Income, filing Return Compulsory or not ?

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  1. rl334709

    rl334709 New Member


    An individual has following incomes for Financial Year 2015-2016.

    (1) Interest from Bank FDs = Rs. 1,81,000
    (2) Interest from Savings Bank A/c s = Rs. 9,200
    (3) Gift of money from Father = Rs. 1,80,000

    Gift of money is received by him from his father, through an Account Payee Cheque. That cheque was credited into his own bank savings account.

    He does not have any salary or business income.

    Here, the gift Rs. 1,80,000 from relative(father) is exempt.
    And his other incomes are of Rs. 1,90,200. (1,81,000+9,200) Total income is Rs. 3,70,200 .

    Que. : 1 : Is it compulsory to file Income Tax Return for this individual ?

    Que. : 2 : If Yes, then is it compulsory to show gift income in the return ?

    Que. : 3 : If, it is compulsory to show exempt income of gift, in the return, then where to show it ? Under which head , in which column/row, in ITR-1 ?

    Que. : 4 : In this case, If this individual does not file Income tax Return , then what problems may he have to face in future? Will it be break of any rule or law, if not filed Income tax return, here?

    Please, provide your guidance.

  2. Karan Batra

    Karan Batra Well-Known Member

    1. It is not mandatory to file Income Tax Return.
    2. There is no provision in ITR 1 to reflect the Gift Income. Gift Income can be disclosed in ITR 2.
    SUNNY NARANG likes this.
  3. ZED

    ZED Well-Known Member

    Whether form 15G/H for non deduction of Tax at source, filed ?
    If not then return should be filed to claim the refund.

    I will advice you to show it under schedule EI in ITR-2A

    Not possible in ITR-1, that's I advice you use ITR-2A
    ITR-2 is quite big and ITR-2A can be used in your case.

    If tax was deducted from the interest income then the bank must have filed the TDS return and hence the govt. has the information for this income but if the same is not declared by you then you will be issued a compliance notice and in that you will have to explain that your income is not taxable.

    If you have to respond either way then its better to file the return.


    There are two thoughts :

    • One thought says ITR stands for INCOME TAX RETURN . Gift received from a relative is not at all an Income . Therefore there is no necessity of disclosing that money received in the Income tax return.
    • Others say that if by any chance your PAN has been reported via AIR transaction than there are chances for Scrutiny. At that times such question can be raised. Then it is better to show it in In Schedule Exempt Income (EI) under Others, in ITR-2 as shown below In ITR1 there is no such separate section, so just show as exempt Income.
    In any case it is suggested that it is good to show Gifts through Gift Deed

    Exempt Income in ITR2

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