Tax applicable on gift money

"... my father gifted amount Rs 15 Lack which I invested in Reliance bond funds. In March 2108 I have withdrawn that amount and given back to my father.
 

When you have done all these transactions, how can anyone else be responsible?

Hi, Sorry I did not understand your reply. Can you confirm is it me should pay tax or my father? Technically I involved in the transactions but the money belongs to my father and the profit took by my father. 

" Technically I involved in the transactions but the money belongs to my father and the profit took by my father."

Just check the name And PAN no. on Reliance Bond Fund........

So, you will have to accept that (technically) you are involved......

Ok. If that is true, Then is it allowed that I invest money on my wife name so that I can avoid tax on returns? Reallly I did not know and that is why I posted query. Is there any income tax guidelines on investment on gifted amount.

Originally posted by : Srinivas Mamidala
	Ok. If that is true, Then is it allowed that I invest money on my wife name so that I can avoid tax on returns? Reallly I did not know and that is why I posted query. Is there any income tax guidelines on investment on gifted amount.

Gifting that amount to your wife will not do anything good as the amount you gifts her will be tax free in her hands BUT the income earned on that gifted amount (if she reinvests that amount) will be deemed as your income (as per  income clubbing provisions of IT act)..... So as you already mentioned above about you being a 20% tax bracket assesse , this will burden you with extra taxes.... 
Assuming your father income falls under  "tax exempted " or "5 %" slab , it is advisable to invest the amount in his " own name " only ...

 

Hi,

Thanks for your update. In the future I am going to invest on my father account. It was due to my father did not have  PAN card at that time I had to invest in my account. As per your comments the money gifted by my father, So is it not true that tax applicable to my father as it is gifted amount. Am bit confused. Just confirm should I pay tax or my father  or anyone?

Originally posted by : Srinivas Mamidala
	Am bit confused. Just confirm should I pay tax or my father  or anyone?

No, as the investments were made in your name only so you will be taxed on the income generated out of those investments (technically).
Resulted income generated on the gifted amount by your father  would have have reflected back as your father`s income if "IT act has clubbing provisions applicable on gift from Father to Son" BUT we have no such provision .
So in present situation its best in your interest to bypass your father`s gifted income by either doing invetsment in your father`s own name only OR your father directly gifts the amount to your wife...by doing so the first income generated out of this father`s gift to your wife will be clubbed with your father`s income (taxable in father`s hand) BUT thereafter this generated income itself will be your wife`s own asset..she can invest this anywhere she wish with no clubbing issues with your father ...hope you got the point...