Tax on money received through inheritance

The situation comes under Section 56 of the Indian Tax Act. The section deals with the income to be chargeable under the head ‘Income from Other Sources’ wherein it exempts the amount of money received by way of inheritance or will for the purpose of taxation. Therefore, the sum of money received by way of inheritance after the death of the elder son is exempt from tax.

On further, transfer of money to grandchildren (younger son’s children), no tax shall be levied either on the grandchildren or younger son on the amount received by grandchildren as Section 56 does not tax the sum of money received by way of gift from a relative. Relative for the purpose of this section includes grandparents.

But on the contrary, tax shall be levied on the amount transferred to daughter’s kids.

 

 

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