I gifted about Rs.6 lakhs to my father as gift 4 years ago, which he deposited in bank on his name as term deposit (fixed deposit). The amount was transferred through NEFT and bank statements can show that this money was received from me. The interest income from that deposit was less than Rs. 60000 and he does not have any other significant income apart from the money he receives from his children to meet the expenses. So he never filed any IT Return. There was no TDS deducted as Form 15H was submitted to the bank each year. As you have rightly guessed, he is a senior citizen.
He used to continue depositing this Rs.6 lakhs and the generated interest in bank in subsequent years too. The interest from that is still below Rs.1 lakh.
Recently, he received notice from Income Tax department regarding two financial years within last 4 years stating that they have noticed a deposit, which is more than Rs.2 lakhs (they are referring to the Rs.6 lakhs deposit, but their trigger being Rs.2 lakhs, the notification has the standard phrase - more than Rs.2 lakhs) in each of those two years, and asked him for explanation.
Is there any filing or IT Return requirements that he missed to do in either of those 4 years that he should have done?
Is it sufficient that he give a response that the deposit is from the gift he received from his son and produce bank statements as proof if demanded by IT department?
Appreciate any valuable response to this. Thanks in advance.
CAclubindia
