Clubbing provisions of income tax.

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 May 2013 From:
ARUNACHALAM . V,
New 30/Old 13,
Subramaniya Swamy Koil Street,
West Chinthamani,
TIRUCHIRAPPALLI-620002
Tamil Nadu. India
Mobile: 9790971353
E-Mail: arun28@rediffmail.com

To: Querry Section,
CA Clubindia.com

Dear Sir,

Reg: Clubbing provisions of Income Tax.
****

I am a retired Bank employee and a Senior citizen also. Hence I will be earning a higher rate of interest for my Bank Deposits than ordinary public. And I am having pension and other Deposits and other investments and I am regularly filing my Income Tax returns even though income is well below the taxable limit.

Now the interest rates are heading southwards. So in order to have better returns, my son who is an Income Tax Assessee in higher slabs wants to give Rs.5 Lakhs to me as a gift, so that I may be able to invest them at a higher interest bearing deposits. Even after adding this interest my income will be well below the taxable limit.

My question is whether this interest earned from the money received as gift from my son is to be clubbed with his income and taxed according to his slab or clubbed with my income and assessed accordingly.

Expecting your response in any Sunday Edition of the Business line.

Thanking you,

Yours faithfully,
V.ARUNACHALAM.
24-05-2013

CA Pooja Agarwal

CA Pooja Agarwal (Expert)

24 May 2013 No clubbing takes place in this case..it will be taxed as per your slab...

Guest

Guest (Expert)

24 May 2013 Pooja has made a exact reply to this question.

You don't need to worry sir, neither the gift will be taxable in either hands nor the clubbing provisions will be applied in this case.

The interest income will be assessable as per your slab rates only.

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