Tax implications

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 June 2016 Hi Experts

Mr. A is having Taxable salary income (Filing ITR properly). Mr. A is withdrawing his salary from the bank and depositing the same into Mrs. B (Mother of Mr. A) bank account on monthly basis (after retaining for himself)

Note: Mrs. B is not having any source of income.

But having F.D in her name and earns interest on such F.D.

Query: Will there be any tax implication in this regard in the hands of Mr. A????

Please help!

Amol S Joglekar

Amol S Joglekar (Expert)
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03 June 2016 Gift to mother is outside the scope of taxability under section 56 of income tax act..

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Querist : Anonymous

Querist : Anonymous (Querist)

03 June 2016 My query is that-
As Mr. A is regularly paying say Rs. 10-15K every month to her mother bank account whereas she is not having any source of income. Can income tax department ask to prove source of her cash receipts???

Or any other tax implication can arise in this regard??

Amol S Joglekar

Amol S Joglekar (Expert)
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03 June 2016 there are provision from both the sides.
01. Clubbing provision u/s 64. : under this the income from such FD may be clubbed in the hands of SON. OR
02. The money is given for regular maintenance. Savings done out of that in the forms of FD shall be ttreated as mother's income.
To cut it short, its a judgemental call. The way you put up the case is important.

Querist : Anonymous

Querist : Anonymous (Querist)

03 June 2016 Yes, second option should be called as Mr. A is paying her to maintain their life style and she is earning further income through FD route.
And for income tax purposes, only interest income should be considered by IT deprt in the hands of Mrs. A Right?
Thanks for replying.

Amol S Joglekar

Amol S Joglekar (Expert)
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03 June 2016 You are most welcome.