Investing money in wife and mother name, what are the limits

u can give gift to your mother and wife 

there is no tax on gift but interet received  

 from gift investmet will be taxable and u also go through 

sections for clubbing income 

Hi Samir,

Thanks for your response. I am not very clear from your responses. When i give gift do i need to show it in my ITR? Do my mother and wife need to show in their ITR? Also what do you mean by clubbing sections? Can you please elaborate on same.

YES U AND THEY ALSO SHOW IN THEIR ITR 

AND IF YOU INVEST IN THEIR NAME 

INTEREST WILL BE ADD UP IN YOUR INCOME (CLUBBING PROVISION WILL APPLY)

 

Hi Samir,

Sorry for repeating same thing. But I am not very  technical to understand the answer you had provided. If you dont mind can you please provide me bit more detailed answer. As well if there are any reference links i can read do let me know i can read and gain some more understanding.

 

-Sachin

Sachin, first of all, gifting assets to relatives does not attract income tax (sec. 56). Also the same need not be shown in any of the ITR(s) as you enquired above. Secondly, and importantly, gifting asset to (sec. 64) spouse i.e. wife in your case, have some implications as Samir indicated above, which is that the income (that she earns from these investments in her name) shall be added to your income and therefore you shall be liable to pay tax on it @ 30% rate, as you indicated above (as you already belong to the 30% slab). Also, to clarify, that in case of assets transfered to mother, no such implications shall be there i.e. income will be taxed in her hands only. Hope this would have given some more clarity.☺

Hi Saksham, Very detailed and explainatory answer. This solves my questions and gives me directions to proceed.

Hi, I have a similar question. I am a salaried employee and I am making deposits in my mother's name. My mother is a house wife. Whether Interest earned on that deposits will be taxable in my hands?

Originally posted by : saroj
	Hi, I have a similar question. I am a salaried employee and I am making deposits in my mother's name. My mother is a house wife. Whether Interest earned on that deposits will be taxable in my hands?

No , no clubbing provision applicable on income generated out of money gifted by a son to his mother .....interest earned will be taxable in her hands only ....