Gift tax

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This query is : Resolved

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This discussion clarifies whether gifting cash to a son-in-law to help pay off a bank housing loan would result in future tax liability for the giver. The consensus is that gifting cash, even a significant amount like £5 lakhs via cheque, is permissible. Importantly, the interest saved by the son-in-law on his housing loan is not considered taxable income for the person making the gift.

Ramesh Mehta

Ramesh Mehta (Querist)
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02 March 2021 Can I gift cash to son in law to pay housing loan he has availed from Bank @ 9%. Will I incur any tax liability in future for interest I would have earned on amount say 5lakhs gifted? I am aged 77 yrs ,widower earning pension & interest on savings staying with daughter.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 March 2021 Cash gift limited to less than 2 lacs. Gift through bank. Interest on gift amount not taxable in your hands.

Ramesh Mehta

Ramesh Mehta (Querist)
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02 March 2021 Thanks for reply. I understand by cheque I can gift 5lakhs to my son in law and interest on housing loan saved by son in law is not added to my income as would be income.Kindly confirm and oblige.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 March 2021 Yes, you can gift 5 lacs through cheque and interst saving will not be added to your income.

Ramesh Mehta

Ramesh Mehta (Querist)
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02 March 2021 Thanks for lucid reply. Thanks again.

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