What documentary evidence is required to satisfy the tax authorities about the genuineness of the gift?
Srivatsan A. Reply There will be no tax implications in the hands of the donees. First, what is sought to be taxed as `income from other sources’ in the hands of a donee is only a gift, which is in the form of money. Any gift other than in the form of money shares, bonds, and so on will not be taxed in the hands of the donee. In any case, gift from a relative will not be charged to tax in the hands of the donee. The term relative also includes the grandfather of an individual. A gift is also a contract, but without consideration in money or monies worth. A gift is valid so long as there is an offer and acceptance; these may even be made orally. However if you think it necessary, a formal letter may be written to the donee who can convey his acceptance of the gift to you. This documentary evidence would suffice to prove the genuineness of the gift. Also, shares and bonds may have to be transferred in the names of the donees in accordance with the respective laws and rules governing them
