Is Gift At the Time Of Marriage Tax Free?

I, my wife and unmarried daughter are three members of my HUF. My daughter will get married in near future. I don’t have much individual income. I want to gift good amount of gold ornaments, Cash and other gifts to my daughter and my son in law from corpus of my HUF. Can I as a karta of HUF give these without any tax burden on my daughter and son in law?
Yogendra Vansia, Valsad

 

Section 56(2)(vii) effective from 1st October 2010 has provisions under which an Individual  person or an HUF receiving gifts of

1. money
2. immovable property being land or building or both;
3. shares and securities;
4. jewellery;
5. archaeological collections;
6. drawings;
7. paintings;
8. sculptures;
9. any work of art

exceeding Rs 50,000  , shall be taxable in Individual or HUF as the case may be.

However, as per the proviso to Section 56(2)(vii) if gifts are received from following persons or circumstances , the gift money shall not be taxable 

(a) from any relative; or

(b) on the occasion of the marriage of the individual; or

(c) under a will or by way of inheritance; or

(d) in contemplation of death of the payer or donor, as the case may be; or

(e) from any local authority as defined in the Explanation to clause (20) of section 10; or

(f) from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or

(g) from any trust or institution registered under section 12AA.

That is good news for you , because if your daughter receives any kind of gifts on the occasion of marriage , it is not taxable in her hand.

 

It is my suggestion , that you gift whatever amount or gifts in kind you want to give to your daughter or son-in-law .But make an gift deed  wherein clearly it should be written

• List of gifts
• That the gifts are being given on occasion of marriage.
• That the gifts are made out of corpus of HUF

The Gift deed should be attested by Notary Public who is found at the court where you live.