I would like to gift Rs. 10/- lacs each to my father in law and mother in law who have no source of income. By doing this they will invest the amount in bank fixed deposits and will earn income thereform. Since their yearly interest amount is below taxable limit no income tax will be payable by them. My query is do I need to club their income in my income? If not then do I have to execute some document so the IT autorities can not question gift. Please advice.
FD interest will not club in your hand, if it would have been clubbed then there will be no use of gift. there are some provisions for clubbing. In this your case there income will not club.
Rectify if i am wrong
what I need to know is the documentation to avoid tax queries, if any.
what I need to know is the documentation to avoid tax queries, if any.
Prepare Gift deed, get it drafted by a proper advocate, register the Gift deed. Some duty will be payable, about 2% on the value of the underlying asset.
Prepare a Gift Deed on Stamp paper.... It will be enough to avoid tax queries
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