Gift from Mother to Daughter (18+)

Tax queries 271 views 3 replies

Sam

Human

39 Points Joined January 2022

My mother wants to give 30lakhs to my sister to save her tax occuring due to interest income.

My sister will invest it in FD or bonds and keep interest earned with herself.

Is this permissable? I read that my mom can transfer this amount to sister as gift and no deed is needed. My sister will show this amount in exempt income in itr. Whether interest earned by my sister will be clubbed with mom's income ?

Based on info I've collected till now, it must be fine. Gift to daughter-> she'll invest it--> whatever interest she earns sister only will show in her itr and pay as per her bracket.

Please provide clarification. Thank you

Replies (3)

JJJ

Need help

687 Points Joined November 2021

Your understanding is correct.

Your mother can gift as much as she wants to your sister. Then your sister can do whatever she wants with it. Any income your sister derives from this gift simply needs to be added to her other incomes. There's no separate distinction after having received the gift, assuming it's money being given.

There's no need for a deed either, so long as it's clear who gave the money to whom.

Sam

Human

39 Points Joined January 2022

Thank you sir. I contacted CA in my town who said IT ppl will catch my sister if we do so coz it's being done for tax evasion. I had read otherwise on multiple sites. Thank you again.