Tax implication of gift tax
Kanchan (Associate) (47 Points)
24 April 2014The transfer itself would be exempt from tax in both cases as it is gift by a relative.
But when the 20 L would be invested by the wife eg in a FD, the interest income will be clubbed in the hands of the husband.[64(1)(iv) Income from assets transferred directly or indirectly to the spouse without adequate consideration]
Income Tax Wala: (Fin. Expert)
(Chartered Accountants)
(2010 Points)
Replied 25 April 2014
Dear Kanchan
Madhvi is right that there is no gift tax will be levied on this transaction
but interest earned on amount so transferred will be taxed in the hands of mother only u/s 64 (1)(vi) because ultimately funds transferred by mother to sons wife.
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