THERE IS NO REBATE PROVISION FOR GIFT IN INCOME TAX... THERE IS ONLY EXEMPTION AS THE SAME IS NOT A TRANSFER U/S 2(47) UNDER INCOME TAX ACT 1961.
1) Father in law will not get any rebate (as there is nothing like REBATE in this case)
2) But father in law will get EXEMPTION from TAX as he was a GOVT EMPLOYEE. Hence 50 lacs NOT TAXABLE as gratuity is a retirement benefit the assessee - your Father in law
3) whether he gifts full 50 or part 25 lacs - It is not taxable to his son and neither to him -- as gift is received from someone and given to someone in BLOOD RELATION - Hence no tax again
4) wherever ur husband invests this gift - it is of no relevance as far as taxation is concerned
5) there is no benefit for donor this gift ur father in law and also there is no tax to him
6) as far as ur husband invests the money in house and keeps ur mother in law as second / joint holder - this is also not taxable to ur mother in law.... as the owner is ur husband
7) if ur husband buys flat and gifts to ur mother in law - this is also not taxable
8) even if the wife wishes - she can also contribute along with husband - NO TAX TO HUSBAND HERE ALSO AND NOR to UR MOTHER IN LAW
9) DONEE has no action to take except showing this amount as gift received in return of income.
10) alternatively, even if ur father in law gifts to ur mother in law (his wife) then also it is ok. i mean if u dont want to route the transaction so long... else whatever u said is also fine....
as per ur saying
ur FIL gifts ur husband and ur husband buys in name of MIL as joint holder
(this will make husbands FILE STRONGER)
as per my saying
ur FIL gifts ur MIL and ur MIL herself buys it and then ur husband can inherit the same in future.
(this will make MIL (MOTHER IN LAWS) FILE STRONGER)
Choose as per ur convenience... NO TAX IS THERE IN THIS CASE.... and FATHER IN LAW GETS NO REBATE ON ABOVE...BUT ONLY EXEMPTION I.E. NO TAX
IF FATHER INVESTS IN FIXED DEPOSIT... his interest income wil be taxable but IF he is a senior citizen he will not fall in tax bracket and hence if BANK deducts TDS he will get REFUND. IF HE IS NOT A SENIOR CITIZEN .... HE WILL GET SAY INTEREST OF 250000 PER ANNUM ON 25 LACS.... HE SAVES!!! AND ON THIS TAX @ 10.30% SAY 25750 WILL COME....BUT HE CAN AVOID THIS BY INVESTING THE AMOUNT OR PAYING HIS LIFE INSURANCE PREMIUM ETC... OUT OF THIS 250000/- INTEREST ANNUALLY (APPROX) :)