From mint · Kirti Jha · · 1m 30s
ITAT rules on wedding gift cash deposits
ITAT accepts ₹2.75 lakh wedding gifts but adds ₹25,000 tax for missing confirmations.
In brief
ITAT accepts ₹2.75 lakh wedding gifts but adds ₹25,000 tax for missing confirmations. ITAT ruled ₹2.75 lakh of a bank employee's ₹3 lakh cash deposits as wedding gifts but added ₹25,000 tax due to missing gift confirmations for amounts over ₹10,000. Originally reported by mint.
ITAT ruling on wedding gifts
The Pune ITAT accepted ₹2.75 lakh of a bank employee’s ₹3 lakh cash deposits as wedding gifts and savings but sustained a ₹25,000 addition due to missing gift confirmations.
Taxpayer background
The taxpayer was employed with Indian Overseas Bank and had declared income of ₹3,10,270 in her income tax return filed on 1 August 2016.
Wedding gift details
Her marriage took place on 3 December 2014 and she received cash gifts totalling ₹3,19,422 from relatives, family members and friends.
Deposit method
She retained the money and deposited ₹3 lakh into her bank account in six instalments of ₹50,000 each to make a fixed deposit.
Tax authority action
The assessing officer treated the ₹3 lakh as unexplained cash deposits and the taxpayer’s explanation was not accepted by the first appellate authority.
Gift list analysis
The tribunal noted the list showed gifts ranging from ₹100 to ₹10,000 with a few amounts between ₹15,000 and ₹19,000.
Tax ruling rationale
The tribunal accepted the taxpayer’s explanation but required confirmations for gifts exceeding ₹10,000 to avoid tax issues.
Practical lesson
Taxpayers should preserve details of wedding gifts including donor names and amounts alongside bank records for tax purposes.
The bottom line
ITAT ruled ₹2.75 lakh of a bank employee's ₹3 lakh cash deposits as wedding gifts but added ₹25,000 tax due to missing gift confirmations for amounts over ₹10,000.
