Hiral Mehta (Job) (118 Points)
10 August 2016Hi,
In this case son transfer certain sum of money to his dependant father on monthly basis & in order to avoid tax on interest his father does FD from the same amount on his behalf as his father does not come under tax bracket. is this acceptable?
Is there any chances of query on such transaction??
suresh
(proprietor)
(425 Points)
Replied 10 August 2016
You have to treat the amount transfered by son to his father as gift. Then father can invest the same in fdr in his own name to avoid the tax in the hands of his son. INcome of interest on FDR will be the taxable in the hands of his father.
Hiral Mehta
(Job)
(118 Points)
Replied 10 August 2016
Any documentation to be done for the same like gift deed or some thing? or its fine if we not do anything.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160609 Points)
Replied 10 August 2016
When transferred though Banking chennels, no other documents needed
Vasuudeo
(accountant)
(30 Points)
Replied 11 August 2016
monika
(audit assitent)
(459 Points)
Replied 13 August 2016
question 1. sir if husband gift rs. 500000 to his wife and wife invest this amount in fdr
so question is arise ,
tax on interest income from fdr will taxable in hand of husband or wife
question 2. sir if father gift rs. 500000 to his son ,and son invest this amount in fdr
so question is arise ,
tax on interest income from fdr will taxable in hand of father or son
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160609 Points)
Replied 13 August 2016
@ Monica:
Because of clubbing provision in both cases
1. Husband & 2. Father
monika
(audit assitent)
(459 Points)
Replied 13 August 2016
sir i want clear second q son is a major child not minor
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160609 Points)
Replied 13 August 2016
No, for major son no clubbing provision applies.
monika
(audit assitent)
(459 Points)
Replied 13 August 2016
ok sir please clear me about all relation , that are covered or not covered under clubing provision on income arise from gifted property or money
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160609 Points)
Replied 13 August 2016
Section 60 to 64 of IT section has clearly specified all the applicable provisions of clubbing of income.
But in short, individual relationship: Minor child, spouse, daughter-in-law (tips to remember)
CAclubindia
