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Tax treatment of money given by father to major son

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This query is : Open

Nitesh Kumar Sharma (Querist)

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....

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

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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