You won't disagree if I
say it is really difficult at times to buy a gift. Giving gifts to the near and
dear ones is a special moment for you as well as for the receiver. Hence,
everyone thinks of presenting such gifts that are meaningful, functional and at
the same time outstanding. A number of people plan for it so that their gifts
become acceptable, admirable and remembered always. They think about the
recipient and then think about the gift that will spread excitement and joy.
They pay a lot of time in thinking, but still they choose wrong ones at times.
Recently, one of my friends gifted a child insurance plan for my son. I already
had one for my son and regretting. In fact, it really needs a logical thought
process especially when you are choosing a financial gift. In this article, we
have discussed few gifts for your near and dear ones which would make them
happy.
For kids
Gold coins
Gold makes a great gift
idea for valued relationships. And when you talk about important relationships
you should not settle for anything but the best. Presenting an envelope of cash
to your colleague’s son or daughter doesn’t look better. There is no other gift
other than gold in the Indian context, as it makes the recipient feel more
important, than the expression of love, respect and piousness. A gift of a few
gold coins would really be helpful in future for that kid whom you are
presenting that.
Gift Cheques
If you are going in a
birthday party of your friend’s son, it is better to present a gift cheque
rather than cash. Certain banks in India issue gift cheques of various
denominations. A number of banks in the
country issue gift cheques of the denominations of Rs. 51, Rs.101, Rs.501 etc.
These gift chques are generally issued free of charge. The cheques are
encashable at par at all branches in India.
Savings account
Open a savings account on
the name of your child. This little step taken would create awareness about
savings and investments in the child. By doing this, you are laying a strong
foundation of financial management in the child. Children get cash on various
occasions like birthday etc. They should deposit this cash in that account.
Term Insurance
Every family has a
lifestyle and a standard of living. But it would be really difficult for your
family and children to maintain the same lifestyle in case you meet with any
unfortunate incident. Hence, it is prudent to buy a term insurance for yourself
and make your children its nominee.
SIP in mutual fund
Starting a mutual fund
SIP in your child's name is another great gift. Just as drops of water make an
ocean, smaller but regular investments would build wealth over a longer period.
There are various schemes available in which you can deposit as little as
Rs.100 regularly every month.
Fixed deposit
If you are a new
generation person, you may consider fixed deposits a bit old fashioned. But
with the interest rates going up and considering the security factor underlying
with this, fixed deposit is really a hot avenue. You may consider gifting a
fixed deposit to the child at his young age. This amount may prove beneficial
when he would need a lump sum amount later.
For Sister
Gold bars and coins
You may be thinking that
she has enough of jewellery and that is being kept in the locker only. Hence,
if you really want to gift her Gold, it is better to go with Gold coins and
bars. These make better investment sense than jewellery, simply because when
you sell them, you get almost the full value. Making charges on Gold coins and
bars are negligible if you compare it with jewellery.
Prepaid Gift card
Gift card is a prepaid
card supported by a magnetic strip that can be used at a number of merchant
outlets across the country either for shopping, eating or for other
purposes. These cards can be loaded with
any value between Rs.500 and Rs.50,000.
This card is far more better than cash, as it will give her the freedom
to choose her own gift. Some banks have also given the flexibility of
re-loading the gift cards.
Single premium ULIP
Suppose your sister is
getting married. Instead of giving an extra household item, you may gift her
single-premium unit-linked insurance. As the name suggests, the buyer needs to
pay just one premium. Hence you pay for it and your sister doesn't need to pay
later. The majority of the premium, after deducting the premium allocation
charge, is invested. Other than the investment, the life of the individual is
insured for a certain amount of sum assured.
For Elders
Health insurance
It is really a nice idea
to gift a mediclaim policy to parents. It would really relieve them from the
pressure of paying hospital bills. No issues, if your parents haven't got
mediclaim policy yet. There are number of insurers who cover senior citizens
above 60 years. Usually, these companies charge more premium for providing
health cover to elderly people. Besides, most of the companies offer cover to
these people with co-payment option.
Monthly income scheme
Parents would get pension
when they would retire, but as a son or daughter; it is really wonderful to
gift them an investment plan which would provide them a monthly income to take
care of their daily expenses. There are possibilities that your parents may not
be depending on your financial help, but this monthly extra cash flow from this
investment gift will allow them to enjoy their life more. Asset management
companies are offering number of Monthly Income Plans (MIPs) which can do for
you. Besides, Monthly Income Scheme (MIS) from India Post can also be
considered.
For Friend
The Silver notes are
looked upon as a good investment and gift option vis-a-vis coins and bars
nowadays. The denomination of the note is equivalent to Silver weight. For
example, an Rs.50 note is equivalent to 50 grams of silver. Jewellers are
minting notes of various denominations such as Rs 500 and Rs 1,000. Your near
one would feel really happy with this gift.
For Driver
It is a nice thing to
gift a personal accident policy to your driver. He may think that buying a
cover is very costly and avoid investing. There are number of personal accident
policies available with insurance companies which provide compensation in the
event of death or disability. For him, you should choose such a policy which
offers compensation in case of death or bodily injury to the insured person,
directly and solely as a result of an accident, by external, visible and
violent means.
For Maid and Servant
Maids and household
servants care for us a lot and it is our moral duty to return something to them
apart from their salary. They don't buy mediclaim policies, but are bound to
pay heavy prices when they visit hospitals. Hence, you may consider buy and
gift a mediclaim policy for your household servant and your maid. In addition,
you can buy maid insurance policy as well for your maid.
Remember, your gift can
be taxed
Though India does not
have a gift tax, but as per the income tax provisions a gift of sum of money or
gift of property exceeding Rs. 50,000 without a consideration could trigger
income tax in the hands of the recipient of the gift. For the purpose of
taxation of gifts, property means: immovable property being land or building or
both, shares and securities, jewellery, archaeological collections, drawings,
paintings, sculptured, bullion/ Silver and any work of art. Tax will be
triggered, if the transaction entails gift of property, other than immovable
property without consideration, if the aggregate fair market value of property
exceeds fifty thousand rupees. The 'fair market value' of a property will be
the price it would fetch if sold in the open market on the valuation date as
determined by a registered evaluator. Gift of sum of money, without
consideration, the aggregate value of which exceeds fifty thousand rupees is
taxable. As for where an immovable property is gifted, without consideration,
the stamp duty value of which exceeds fifty thousand rupees, the stamp duty
value of such property will be taxed in the hands of recipient. The recipient
of gift has to pay tax on the value of the gift.
All the thought behind a
gift is to give some happiness and not to add to the worries of the recipient.
Hence, gifts of sum of money or property received are not taxable in the hands
of the recipient in the following cases: (a) from any relative; or (b) on the
occasion of the marriage of the individual; or (c) under a will or by way of
inheritance; or (d) in contemplation of death of the payer or donor, as the
case may be; or (e) from any local authority as defined in the law; or (f) from
any fund or foundation or university or other educational institution or
hospital or other medical institution or any trust or institution as specified
in the law; or (g) from any trust or institution registered under law.Any gift
you receive from your relatives is not taxed irrespective of its value. For the
purposes of taxation of gifts, relative means: (i) a spouse; (ii) brother or
sister; (iii) brother or sister of the spouse of the individual; (iv) brother
or sister of either of the parents of the individual; (v) any lineal ascendant
or descendant of the individual; (vi) any lineal ascendant or descendant of the
spouse of the individual; (vii) spouse of any person referred to above.
Gifts received at the
time of marriage
All gifts received by you
at time of marriage are tax free, irrespective of their amounts and
irrespective of the person gifting them to you. The gift doesn't have to be
given on the exact day of your marriage - it can even be a day before or after.
There is no specific limit of time, but you should be able to establish that
the gift was given for your marriage.
Income from gifts
If one invests the cash
gifted to in shares, the income generated from this will be taxed. Though the
one who receives the gift has to bear the tax burden on any interest earning from
it, the case is different in the case of spouses. Suppose a man gifts his
spouse Rs 5 lakh and the entire amount is put in a fixed deposit earning 9%
interest a year. This means that the wife will earn Rs 45,000 as interest
income, but this money will be added to the husband's account and he will have
to pay tax on it.
Transferring assets to
spouse or fiancé
If you transfer a
property, for example a house to your spouse, any income accruing to your
spouse from this property would be clubbed with your income. However if you
transfer the same property to your fiancé to which you are getting married
soon, then even after your marriage, any income generated from this property
shall not be clubbed under you income.
(Published in Money Mantra)
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