Gift money

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Subhransu Mohapatra

29 Points Posted on 19 January 2016

I have annual income of 5 lac. After getting deduction, I have left with 1 lakh of taxable income.

I asked about gifting the money to my unmarried (not minor) daughter. But came to know that I won't get tax benifit by gifting it to her this year.

But next year on interest on that amount , my daughter will have to pay the tax. Not me.

It's kind of confusing.

So can you give an example of this 1 lac , how it will benefit me next year but not this year.

Please give a example on both the scenario so that it will be really helpful.

Thanks,
Subhransu

Replies (3)

CMA Poornima Madhava

CMA

9106 Points Posted on 19 January 2016

Your query is bit confusing. Is deduction of Rs.4 lacs by way of 80C (Rs.1.5 lacs) and balance Rs.2.5 lacs exemption limit? If yes, taxable income would be Rs.1 lac after all these.
In order not to pay tax on this 1 lac, you can invest in NPS (80ccd), mediclaim insurance (80d), donation (80g), interest on housing loan if any etc.
If you gift your income to your daugher, such income will not be taxable in her hands but will still be taxable for you.

Subhransu Mohapatra

29 Points Posted on 19 January 2016

Thanks for your reply. I just have 1 lac taxable income. If I gift that money to my major unmarried daughter, then how it will be taxed on me and my daughter?

I am coming under 10% tax bracket and my daughter has no income.

CMA Poornima Madhava

CMA

9106 Points Posted on 19 January 2016

I did not say such income would be taxable in the hands of your daughter :). If you gift your taxable income to your daughter, then such income would still be taxable in your hands but it won't be taxable in the hands of your daughter.