11 January 2017
sir, One grand father is giving Rs. 5000 every month to his grand son. The father of son is depositing in RD every month . After maturity the amount transfer to PPF . Now my question is that either the interest part will be taken in grand father or his father income if child is minor .
12 January 2017
During minority all the income earned by the child is clubbed to his/her parent income(either mother or Father). There is one exception to the previous line, that if the child(minor) earn any income from his/her talent(singing, dancing, panting etc), then that income will b taxable in hands of the minor only. As per ur case, practically u can't treat the amount received from grandfather as a gift, coz its recurring(every month) in nature. But there is nothing mentioned in law regarding that, so u can treat it as gift from grandfather. But any income generated from that gift is fully taxable(if crosses the limits mentioned under different sections). As the recipient of money is minor hence the interest income(or any other income) generated from that gift is taxable and will b clubbed along with parent(either mother/father) income.