Tax on fund transfer

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Rahul Agarwal (Querist)
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29 July 2011 Would my mother be taxed on the amount that I send her every month for her household expenses.

Note: I pay tax every year on my Salary earned.

CA Aditya Goel

CA Aditya Goel (Expert)
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30 July 2011 NO she is not required to pay tax on that. its not her income. Internal fund transfer for hosuehold expenses, pocket money etc. are not income to the receiver.

Rahul Agarwal

Rahul Agarwal (Querist)
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05 August 2011 Hi Aditya, Thanks for the prompt reply.

By Internal Fund Transfer, do you also include fund transfer among different bank accounts [in this case, from My Savings bank account to My Mom's Savings Bank account]...

can you also recommend any section or sub section under IT Act [just for my future reference].

CA Aditya Goel

CA Aditya Goel (Expert)
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05 August 2011 By internal fund transfers i meant transfer of fund (whether cash or bank ) within a family like from husband to wife or from father to son and in your case from son to mother.
For her its a gift from you (relatie) and u/s 56 i.e. income from other sources Gift received from relative is exempt.
so what ever amount you send her for household expenses can be regarded as gift from relative and thus exempt.

while filing her return she can decalre these receipts as gift from relative and that will be exempt.

Its similiar to case where a father sends cheque everymonth to his son for his expenses as pocket money etc. this money is exempt in hands of son.

Rahul Agarwal

Rahul Agarwal (Querist)
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06 August 2011 Thanx a Ton... thats answers my concern.

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