If a person receives money from son in law(exempt from tax under Sec-56) and invests that amount in property in his own name , if rental income from that property will be clubbed in son in law income or his own income?
Also, when he sells that property, will capital gains be taxable in hands of son in law or in his own hands?
If he later sells the property and decides to transfer this amount to his daughter in inheritance, will it change anything?
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Clubbing provisions in case of gift from son in law
Replies (4)
Quick Summary
Please note that any gift received by In law from Son in law is exempt u/s. 56(2).
Also note that the gift is not subject to be clubbed under any sub sec of IT act 64.
So, you may re-draft your query based on the above principle.
I just wanted to confirm that if father in law uses the gift received from S-I-L in any way e.g F.D, Investment in shares, or purchasing property and derives income by way of interest, dividend or rent, will that income have any implication on son inlaw taxable income?
As income arrived on any amount transfer to spouse or sons wife involves clubbing provisons, does it also applies to son in law?
As income arrived on any amount transfer to spouse or sons wife involves clubbing provisons, does it also applies to son in law?
No clubbing of income in this case.
The income derived from the gifted amount will be taxed in the hands of Father In law itself.
Clubbing provisions will not attract.
income from investments as well as capital gain on transfer of investment will be taxable in the hands of father in law itself
income from investments as well as capital gain on transfer of investment will be taxable in the hands of father in law itself
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