Income tax and gift deed

if clubbing income provisions not attracts then it is good option 

can u explain why clubbing provision will apply in case of umarried sister

1. For movable property/cash/cheque, No any deed is required legally. However it is advisable to have a gift deed to justify in case of any query from IT that it is genuine gift and not loan. 

2. She can still deposit Form 15G in her bank as her total taxable income. Further, no clubbing of income section will apply.

Thanks a lot. 

This answers My  query.  However when I was checking on Internet I found following on below web page which says that in some cases clubbing provisions will apply. For example web page says following. 

https://www.jagoinvestor.com/2013/03/income-tax-on-gifts-received.H T M L

" if a husband gifts Rs 10,00,000 to wife, there is no ta to be paid by wife on Rs 10 lacs received, however when she invests that money and if any interest income is generated, it will be clubbed with husband income. Read all about income tax clubbing rules  here."

I am not from Finance background howeverr  would like to understand more why FD interest will not be clubbed in my case. where as in above statement interest income is clubbed with husband income.

Thanks again for your reply.

The government is keen on making Benami Laws more stringent. So all those asset owners who fail to produce legal source of earning that allows him/her to own the asset risk being termed as Benami. [In this case your Sister].

Please note property here means not only immovable property but also movable, tangible, intangible property including jewellery cash and investments. [In your Sister's case FD investments in her name without having any known source of income]

The Benami law states that property acquired in name of any person [other than spouse or unmarried daughter] like brother, sister, father, mother or son could risk being confiscated and jail time.

All the 'Gifts' given to relatives would be probed closely. [In your case Monthly Gift Deed's of Rupees 30,000/- to your sister]

In your case it is easy to understand that.

Don't take a Myopic view only from the Income Tax point angle. Just because it's not clubbed according to Income Tax Act does not mean you are off the hook for indulging in such transactions.

Take help of a professional and indulge in proper Tax planning.

I'm not replying to you.  He's free  to pay heed or ignore whatever I have said. You dont need to interfere.

Great . Thank you. 

" The Benami law states that property acquired in name of any person [other than spouse or unmarried daughter] like brother, sister, father, mother or son could risk being confiscated and jail time. " 

The above appears to be wrong as benami law relates to property acquired in name of any peson other than blood relations.Experts can clarify

Thanks for you comments. 

I understood so far that from Income Tax point of view , it is good transaction and no clubbing provision will apply. 

Now from Benami Law point of view , I see following is mentioined in Benami defintion on internet. 

"A benami transaction is one where a property is held by one person and the amount for it is paid by another. The transaction is done to benefit the person who pays for the property either directly or indirectly. "
 

However in my case I do Not plan to use (or get benefit from) the amount in future which I am gifting to her. It will remain with her forever. Moreover I plan to create a Gift deed for documentation purpose ( I believe writing on plain paper is good enough or correct me if I am wrong).  So this amoung transferred should not be considered Benami.

Please suggest.

Thank you.