Clubbing query (when gifts given to multiple family members)

have a query regarding clubbing provisions, if anyone has any input!

Mr X is going to turn 80 and he wants to gift money to several family members.

He plans to redeem mutual fund investments and pay the appropriate capital gains tax on the redemption.

From the redemption proceeds, he wants to gift by RTGS Rs 10 lakh each to his wife, daughter, son, son-in-law, daughter-in-law and the grandchildren.

 

Question is what could the possible clubbing issues be in such a situation? Also, all the adults (wife, daughter, son, daughter-in-law, son-in-law) are income earners and taxpayers on their own anyway. And maybe earning more than the old man.

And of course, whatever each recipient of the gift earns from whatever they do with it is subject to tax. That's clear.

From all that I have read, the gifts to the daughter / son / grandchildren seem to have no issues. But the wife / daughter-in-law / son-in-law situation is not too clear.

Replies (3)
Quick Summary
This discussion explores the clubbing provisions related to gifting substantial sums to multiple family members. The main query concerns whether gifts of Rs 10 lakh each to a wife, daughter, son, son-in-law, daughter-in-law, and grandchildren from mutual fund redemption proceeds could trigger clubbing issues. While gifts to children and grandchildren appear straightforward, the tax implications for gifts to a spouse and daughter-in-law are less clear, particularly regarding capital gains tax liability.

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.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
12 October 2026
Finance

I-Genext Consulting Private Limited

New Delhi

CA

View Details
Company
21 October 2026
CA INTER/ BCOM WITH EXPERIENCE

CA S KUMAR GUPTA & CO

Amritsar

CA Inter

View Details
Company
ARTICLESHIP 17 October 2026
Articled Assistant

RRPM & Associates LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 07 October 2026
Article Trainee/ CMA Trainee

RMA And Associates LLP

New Delhi

CA Inter

View Details
Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details
Company
14 October 2026
Asst. Manager/Dy Manager (Costing)

manufacturing

Pune

CMA

View Details
Company
ARTICLESHIP 22 October 2026
Articleship intern

Srinath Manikanta

Hyderabad

CA Inter

View Details
Company
ARTICLESHIP 20 October 2026
CA ARTICLE

AMKN & CO

Noida

CA Inter

View Details