Gift Deed between Relatives

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This discussion clarifies the need for a gift deed when a mother gifts substantial amounts to her son or daughter-in-law over several years. While not always mandatory, a gift deed provides legal clarity. It's not required annually, and a single deed can cover future gifts within the financial year. Importantly, clubbing of income provisions can still apply, even if the gifted money is invested and capital gains are realised much later.

D M

D M (Querist)

24 December 2024 Hi Experts,
Can you please help me with my below queries regarding Gift deed

1.If Mother gives Son or daughter in law a substantial amount as GIFT spread across 2-3 years do you need to make a Gift deed ?
2. If yes do we have to make it every Financial year ?
3. Is it possible to make one in this financial year and to mention the total amount to be gifted over next few years
4. If gift deed is in place does the clubbing of income apply ?

Appreciate your inputs .

Thanks,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

24 December 2024
1 While not mandatory, a gift deed formalises the transaction, providing legal validity and clarity.
2 No.
3 Yes.
4 Clubbing provisions applicable for gift to spouse and daughter in law.

D M

D M (Querist)

02 January 2025 Thanks Sir and wish you happy new year.
If Mother in law gifts cash to Daughter in law and Daughter in law invests that money via her bank account in Mutual Fund which is not redeemed in next 10 years or so what happens in that case.Will clubbing be considered when the capital gains is realized after 10 years or so?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

03 January 2025 Welcome and wish you a very happy and prosperous new year 2025.
Clubbing provisions applicable.

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