Gift from parents

Gift received is exempt from tax. You may show interest from FD under income from other sources in your ITR.

Dear Hairsh

1. As Mihir pointed out, gifts from "relatives", which include parents, are not taxable.

2. As you said you have no other income except from the FD interest, which i assume will not cross more than Rs.10000 yearly per FD, your taxable income doesn't exceed Rs.2,50,000 (for FY 2014-15). As such you are not legally obliged to file ITR. However, since an ITR filed can be of good use for many other purposes like for applying loan, for taking insurance etc serving the purpose of Income Proof, it is advisable to file an ITR will Zero Tax Payable.

3. Further, in case your bank has deducted any TDS, you can claim refund.

4. You can show the interest on FD under the head "Income from Other Souces" and the Gift Received under "Exempt Income" Schedule. You can use ITR-1 (Sahaj) - the name may change each year.

Regards

Ajay

Thank you Mihir & Ajay.

Further can I avail exemption limit of Rs 10000 each from two banks?Or limit of Rs. 10000 will be aggregated from both the banks?Because aggregate Interest from both the FDs will be more than Rs. 10000 for sure.

And I also wants to open a PPF account.Is it useful for me?I am not employed,doing my internship in CA firm.Does it require any other proof of income?

One more question:Is cash gifted needs registration? 

Thank You again.

1. I assume you are asking about deduction u/s 80TTA. You cannot avail of it as deduction under that section is available only for interest earned on savings account and not for interest from FD.

Even for savings interest, deduction for Rs.10000 is the total deduction available and not per bank or branch.

2. PPF is defintely a good option and is considered the most tax efficient amongst fixed income investments eligible for Sec.80C deductions. You can maintain the account by investing as low as Rs.500 per annum. However, you must know that there is lock in period of 15 years since inception and also interest in cumulated and not paid out quareterly or yearly. Being an intern, you can start off investing us surplus savings and later on getting emplyed, you can increase the investement unto Rs.150000 besides claiming the Sec.80C deduction.

There is no need of income proof. You can open easily a PPF account at any SBI branch or Post Office.

3. Gift deed is not necessary. But if the amount if substantial you can consider executing a gift deed.

Many many thank you Ajay.