Save income tax by gifting to parents

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 July 2013 Hi Experts,

I am an IT professional, and the only source of my income is my salary.

I would like to know if I give a portion of my salaried income to one of my parent, will that portion be exempted from my income tax base amount i.e. will it reduce my taxable income.

Also I would like to know will this exemption be over and above the 1 lakh limit which is allowed for various tax free investments such as L.I.C. premiums etc.

Would be really grateful to you, if you can satisfy my query.

Thanks in advance.
Babu

Querist : Anonymous

Querist : Anonymous (Querist)

18 July 2013 Experts,

Any help. Please...

Thanks,
Babu

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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23 July 2025 Hey! About saving income tax by gifting to parents—here’s the scoop:

1. **Gifting money to parents does NOT reduce your taxable salary income.**
Your salary income stays the same; gifts given to parents aren’t deductible from your income. So, it won’t reduce your taxable income.

2. **However, gifts received by your parents from you are generally not taxable in their hands.**
Gifts from relatives (including children to parents) are exempt from tax for the receiver.

3. **How can gifting to parents help in tax planning?**
If your parents have income (like interest, rent, etc.) and are in lower tax slabs, transferring money to them may save tax overall, as they might pay tax at lower rates or none at all (if below exemption limits).

4. **Regarding the ₹1 lakh limit on tax-free investments (like LIC):**
That limit is separate and related to deductions under sections like 80C. Gifting to parents doesn’t impact this limit.

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**Summary:**

* Gifting parents does not reduce your taxable salary income.
* You can help reduce overall family tax burden if parents invest or earn less tax.
* Your own salary tax is unaffected by gifts given.

If you want, I can suggest some better tax-saving routes for your salary income. Want me to?

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