Tax treatment of money given by father to major son
This query is : Open
01 August 2014
Dear Experts,
Pls. discuss following query:
Father Mr. X gives Rs. 100000/- to his major son (Unmarried) on which son earns FD Interest of Rs. 1000/- per month.
Son has no other income.
What is the tax treatment in the hands of father & Son.
Will clubbing of income apply?
Thanks....
Pls. discuss following query:
Father Mr. X gives Rs. 100000/- to his major son (Unmarried) on which son earns FD Interest of Rs. 1000/- per month.
Son has no other income.
What is the tax treatment in the hands of father & Son.
Will clubbing of income apply?
Thanks....
01 August 2014
Money gifted from father to son will not come under section 56(2)since gift received from relatives is exempt. so far as clubbing provisions are concerned, clubbing provisions will not apply as such transaction is not covered u/s 64 and since the child is also major, income accrues to him as interest on FD will be taxable in his hands only. Clubbing provisions would have applied had he been a minor.
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