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One of my friend, who is very poor, is hospitalized. His total medical expenses are around 1.8 lakhs. He is not in a position to pay even a small amount on this.

So, I am requesting people send money to my bank account. I will pay his medical bills with that money.

As per Income Tax rules of India, if I receive more than 50,000/- from others in my account, I will be taxed. So, is this applicable in this scenario as well?

  • Why not just tell people to send the money to your friend's bank account? – Philipp Jul 25 at 10:42
  • actually, he is very poor and doesn't have one as far as I know :( – Gauranga Jul 25 at 10:47
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    In most jurisdictions there would be some legal construct to set up a "trust fund" - a separate legal entity for the purpose to hold funds for a specific purpose. But I don't know if and how that works in India. When someone pays money to a trust fund, that money belongs to the fund, not to the person who manages the fund. So it doesn't affect that person's taxable income. However, the trust fund itself might be a taxable entity and the beneficiary of the fund might have to pay taxes when they receive money from the trust. – Philipp Jul 25 at 10:55
  • Not only you may be taxed, you can also get investigated for collecting money by misleading – Dheer Jul 25 at 14:41
  • 1. The important question is "do you have to pay tax on gifts in India?" 2. Why not get the friends to send the money to the hospital direct? – Martin Bonner supports Monica Jul 29 at 13:38
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Why would it not be?

See, you are not a charity. If you would set up the legal framework, it may not be, but generally - do not assume you deserve special rules just because "needy".

  • he should not be taxed, he is simply collecting and using for other person, there is no profit or even intention of profit is involved. – Raj Jul 25 at 15:09
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    @Raj The issue isn’t should/shouldn’t, but rather, will/won’t. – Lawrence Jul 25 at 15:16
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    Exactly. And yes, he is collecting money. That is called income. He is then spending it on a non-deductable expense. See, if he wants to deduct third party medical costs - that is called a non profit and that comes with paperwork. Life is unfair, and it is run according to rules and regulations and those say "income is to be taxed and you then can spend th erest how you like". – TomTom Jul 25 at 15:19
  • "He is collecting money. That is called income." Not in the UK it isn't. I know nothing of Indian tax laws, but I wouldn't be surprised if they are at least somewhat similar to the UK. He is being given gifts; gifts are not liable to income tax. – Martin Bonner supports Monica Jul 29 at 13:36
  • Really? You may find out that "collecting gifts" from unrelated people like this is taxable as income. Proof? How are beggars taxed? And then there is taxation on that. The tax man is not to be cheated. – TomTom Jul 29 at 17:24

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