Clarification on Cash Gift to Parents

Hi,

1. It will be exempt u/s 56

2. Father will not be liable for any tax liability.

3.Clubbing of income will also be not applicable. So the returns by father will be taxable to father only.

In my opinion,

1)No tax implication for you

2) Father income( gift) will be taxable as it exceeds Rs.50,000/- as per sec 56

3) clubbing provisions not will be attracted.

Thanks Halim,

There are mixed feedbacks and hence a confusion. Any IT consultant or practioner has got any confirmed view?

Abhinav, excuse me if you are practioner and your view was practical. Just trying to be double sure.

In my opinion halim siddiqui  is right at second point

Hi,

Mr Agrawal is right and the supportive view is extended below.

1. Gifts are taxable u/s 56(2), but relatives are out of tax purview so  gift will not taxable in hand of your father.BUT make sure that you gift the amount by an account payee cheque.Althogh A/c payee cheques are not required but it for safe side to do such transaction so sa to have a proof of payment..

2.Clubbing of income will also be not applicable. So any income generated by your father using the gifted amount will be taxable to your father only.

Thanks Ritesh,

Any comment on point#2?

Point #2 of mine....?.what kinda comment you require.??

I dont think Point 2 is right. Because, sec 56(2) dont apply to gifts to relatives.U can count on me for that.So there will be no problem for your father or anyon.

I agree with Kingsley.. If you look into the exceptions to Section 56(2)(vi) is says any gift received from any lineal ascendant or descendant is not taxable.

So the gift amount will not be taxed in the father's hands.

I have some confusion regarding cash gift to parents excemption.
1) if i am gifting 2 Lac to my parents, is it excempted from taxable salary ?
2) In which incometax rule/Act this thing comes ?
3) Our tax is deducted from employer with each month salary, so where to mention this cash gift money as deductable income ? (If income tax return, there is no such section in ITR xls sheet)