Clubbing query (when gifts given to multiple family members)

Clubbing providsion will apply only in case of gift given to wife & daughter-in-law.

Thnak you. And yes, that is my understanding of the rules.

But I am still strugling to make sense of it.

When is it taxable in the hands of the person giving the gift? He redeemed mutual funds, paid capital gains tax, and then gifted the proceeds to his wife and daughter in law. Both of them invested that gift amount in mutual funds. God only knows when they will redeem their MF investments. And whenever they do, they will anyway have to pay any applicable capital gains tax (both are income earning and taxpaying).

And anyway the daughter in law earns more and is in a higher tax bracket (she pays surcharge!). So how is this determined?

Whenever the units are sold, the capital gain will be taxable in the hands of the donor and not in the hands of wife or DIL. The capital gains liability is only for once but trasferred in the hands of donor. Donee need not pay it again.