Gift to father

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rohit (Querist)
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21 October 2013 A PERSON HAS TRANSFERRED 2 LACS RS TO HIS FATHER ONLINE
WHETHER THIS AMOUNT IS TAXABLE ?
WHAT ARE DOCUMENTS REQUIRED?

NOW INTEREST ON 2 LACS IS TAXABLE IN WHOSE ASSESSEMENT?

CA Pallav Singhania

CA Pallav Singhania (Expert)
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21 October 2013 Gifts received from any relative, as defined under the Act, is not taxable.

In case of gift of money received from a relative, it is advisable to have gift deed/letter of understanding exchanged and kept in records by the recipient of the gift for future reference.
Hence, it is prudent to maintain documentary evidence in respect of the gifts received, to avoid any dispute with tax authorities at a later stage.

rohit

rohit (Querist)
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21 October 2013 WHAT ABOUT INTERST ON 2 LACS

CA Pallav Singhania

CA Pallav Singhania (Expert)
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21 October 2013 Such interest will be be taxable on the hands of the father...

CA Pallav Singhania

CA Pallav Singhania (Expert)
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21 October 2013 Let's assume that your parents are senior citizens (above 60) and have no income. You can gift them any amount of cash for investing in high-return instruments such as senior citizen's savings scheme.

As senior citizens do not have to pay any tax for annual income up to Rs 2.5 lakh, the interest income does not become taxable unless it exceeds this exemption limit. This means you can invest up to Rs 25 lakh through each of your senior parents without any source of income if the annual interest or return is 10%.
You can invest up to Rs 50 lakh through your senior parents and have a tax-free annual income of Rs 5 lakh.

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