Treatment of cash gift given to daughter in law, and how it is taxed?

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This discussion clarifies the tax implications of giving a cash gift to a daughter-in-law. While the recipient is generally exempt from tax on the gift itself, the income generated from that gifted money may be taxed in the hands of the giver under the 'clubbing of income' rule. It's also noted that cash gifts exceeding a certain amount may not be permitted.

Virendra

Virendra (Querist)

02 April 2025 my tax consultant told me that as per the new amendment in the recent budget, the person receiving the cash gift will be fully exempt. however the person who is giving such gift will be taxed as per the individual slab of income tax (not on the full value of cash gift but on the income earned out of the funds invested from the cash gift in accordance to the declaration from the receipient). is it true?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

02 April 2025 There is no amendment, the rule prevails. It is known as clubbing of income. The income earned by daughter in law will be taxed in the hands of FIL. You cannot give cash gift of an amount equal to or more than 2 lakhs.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

29 September 2025 Good luck..

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