Procedure of gifting 90crore to a non-relative (by cheque) in india

I would like to know very specific details on some aspects of gifting money in India.

My best friend will be gifting me 90crores within a month! She (the donor) is intending to draw that amount as two cheques, from two banks where she has saving accounts, and transfer to my saving accounts (where I have accounts in different branches of the respective banks). She will be giving me this huge amount absolutely as a gift for a personal favour (according to her, for a critical personal advice I had provided a while ago which helped her immensely). We are not blood relatives and belong to different parts of the country.

We are planning to consult a very competent (tax) lawyer who has got expertise in executing a gift deed efficiently. We also expect the lawyer to help us to deal with tax payment, advice us on how to reduce tax on this gift, help us file income tax return and in related matters.
Though I am very excited I have many concerns and queries in mind about this.

 I understand that gifting to non-relatives is taxable under ‘income from other sources’ (30%+10% surcharge on the taxable amount). Is there any way to reduce the taxation? (eg. Donating <10% of the gift amount to charity to get tax relaxation benefits, gifting real estate after donor buying it before giving it to the donee).

 Since this is a cash gift (movable property) involving large amount, is it necessary or advisable to register the gift deed with stamp duty paid? If so how long it will take to register? How much is the stamp duty?

 If this doesn’t necessarily need to register, instead, just writing the deed on a plain paper is enough (with signatures of donor and donee), whether signatures of two witnesses and notarisation also needed? And who are eligible as witnesses and notary person? Should they be relatives or acquaintances of the donor or donee, or could they be anyone else?

 We are planning to carry out this (gifting) at a metro (which is not situated in the home state of the donor or donee. Is it necessary that this transaction, gift deed preparation, and consulting with a lawyer should take place in the home state of the donee where High Court situate or within income tax office circle under which donee’s has registered his PAN (as an assessee).

 What are documents we both should have while consulting a lawyer and drafting a gift deed. I have applied for a PAN card (which I hope I will receive within two weeks). Both of us will be carrying our bank passbooks, cheque books, PAN cards, passports and other identity proofs and ATM cards. What are the documents needed other these?

 Should I (donee) pay tax in advance as soon as the deed is made or at intervals before ending of the current Financial Year? Should I file my income tax returns soon after the deed is made? Should I approach Income Tax Officer (my assessing officer of the region) prior or after the deed is made to intimate about source of the deposit with relevant documents? (I am planning to make an overseas trip after couple of months).

 Will bank allow her (donor) to transfer this huge amount as cheque to my account in a single day (with a single cheque leaf) or should both of us furnish other documents to Managers of the respective banks? Should we meet bank manager along with the lawyer we will be consulting?

 What kind of lawyer I should consult? An income tax lawyer or a lawyer who has an expertise in banking fields? What kind of services and advice such lawyer usually can provide? Should I approach a law firm? We would like to consult a highly competent lawyer? Can you suggest who will be competent enough to do this? How should approach them? Shall we consult more than one lawyer? What will be lawyer’s fees in this specific case?

Seeking answers from experts,

Thank you.......
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Anonymous User
Asked Sep 09, 2013

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