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Gift _ taxability

Tax planning 615 views 2 replies

Hi,

Mr. A is minor. He receives gift of Rs. 1 Lakh from his mother's father. As understood this amount would not be taxable in A's hand as gift is received from lineal ascendants or descendants..

Mr. A invest this amount in Bank FD ? will it attract clubbing of income provisons ?

Mr. A plans to invest the same in PPF Account. But Mr. A's father and mother both have thier PPF Account in which they have already contributed maximum limit which is Rs. 1 lakh each. Can Mr. A (who is minor) deposit Rs. 1 lakh in his PPF Account.

Thanks

Replies (2)

Clubbing provision will apply if he invests in bank FD and the interest earned shall be taxable in the hands of the parents.

He can open a PPF account in his name along with a guardian/parent who shall continue to operate the account on his behalf until he reaches majority. 

Agree with Mihir

 


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