Gift tax and Tax on income generated from tax

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Vishal Kanani (Querist)
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01 April 2021 Title: Gift tax and tax on income generated from that Gift*
Gift received from the relatives is tax exempt regardless of the amount. The first income generated from the gift in case of spouse is clubbed with the gift sender for tax purposes. The second income generated from income of the gift is not clubbed and taxed at the receiver spouse end.
Q1. Is this all true?
Q2. What if I send a big gift (Say rs. 20L. Income tax already paid on it by me) to parents? Is the income generated from the gift money (Say fd interest on that 20L) clubbed with my income or taxed at parents' end? What if parents are not senior citizens, does that change things?
Q3. What if I send the same gift to siblings? Same questions.
Basically, there is no tax on the gift money at receiver end for relatives, but in which cases the income from gift is clubbed with the sender income and in which cases taxed at the receiver end?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 April 2021 1 it's true.
2 Gift to parents clubbing provisions not applicable.
Clubbing provisions applicable for spouses, minor children and daughter in law only.

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Gift tax and Tax on income generated from tax

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