From Affection To Assessment Tax Implications of Cash Gifts From Grandparents

While these gestures hold cultural and emotional significance, they may also draw scrutiny from the Income Tax Department. A recent case before the PUNE ITAT (Income Tax Appellate Authority) highlights the importance of proper documentation in such matters. Vikram filed his Income Tax Return (ITR) for Assessment Year (AY) 2017-18, reporting an income of Rs 3 lakh. Key Takeaways:Burden of Proof: The taxpayer must prove the authenticity of any cash gift or deposit. Conclusion: While it is true that gifts received from relatives as defined under the Income Tax Act are not taxable, the definition specifically includes lineal ascendants or descendants, which covers grandparents.