Tax liability after gift given by sister to his brother

All,

Sister has given Cash Gift of Rs 50 Lacs to his own brother. After receiving the cash gift , brother has put the money in the bank  Bank has paid the interest ( to brother ) after deducting the TDS as applicable.  Now brother is ready to pay the required income tax as against interest earned after adjusting the TDS paid.

Now my question is :-

Whether brother has rightly paid the income tax as per above narration or

Whether this interest earned by brother will added to her sister income and sister has to pay the required income tax under clubbing the income tax under sec 64 ( I am not right exact section )

Whether Gift tax transaction between sister and brother is coming under clubbing the income under income tax

Seeking your logical views on this

Rajeev

 

 

 

Replies (2)

There is no tax payable by the brother for receiving this gift. However, it is very risky to transact in cash, and deposit of 50L in in cash in the bank will be noted by the IT dept. Even if gift deed is prepared, which in this case is a must, the IT dept may even question the source of this cash with the sister.

Hello,

Clubbing provision does't apply. Its taxable in brother's hand.

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