We all know that gift tax has been abolished and that gift to [b]relative[/b] of any amount is not taxable . But any income generated from that gift is taxable in the hands of the donor due to clubbing provisions. Am I right. I had doubts as I have been reading lots of article contrary to it.
Please advise
clubbing and gift tax
Replies (6)
The One Says:
Yes you are correct for eg. If an asset is transferred to the spouse, income from such asset is also treated as income of the individual.
Yes you are correct for eg. If an asset is transferred to the spouse, income from such asset is also treated as income of the individual.
Thanks
It is not always it depands whether gift revocable or irrevocable If gift given is irrevocable then the question of clubbing does not arise.
This post has served its purpose - deleted.
The One & Expert Knowledge,
From ur expalantions, i understand that only in 2 cases can a transfer be irrevocable i.e trust and one made before 1/4/61. In all other cases it is revokable ( which will then cover all the gifts). Hence income will be taxable in the hands of the transferor though gift tax would not be paid if transferee is a relative
Am i right.
From ur expalantions, i understand that only in 2 cases can a transfer be irrevocable i.e trust and one made before 1/4/61. In all other cases it is revokable ( which will then cover all the gifts). Hence income will be taxable in the hands of the transferor though gift tax would not be paid if transferee is a relative
Am i right.
The One Says:
My interpretation is that as per the provisions revocable transfer ie gift to be covered by income tax act must be revocable at the will of the transferor. However gift cannot be revocable at the will of the donor.
My interpretation is that as per the provisions revocable transfer ie gift to be covered by income tax act must be revocable at the will of the transferor. However gift cannot be revocable at the will of the donor.
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