Hi Experts ,
I have another question on Gift Tax Since there is no Tax on Gift if it is made to relatives.
If Mr. X has gifted an amount from his income which is already taxed say Rs.1,00,000 to his 2 sons MR. Y and Z (Both above 18 and having no other income) there will be no tax.
Mr. Y and Z deposited them in FD and earned interest.
Now if after 1 year Mr. Y and Z Gift back that amount (Rs. 1,10,000 with interest) to Mrs.W (Mother) then also No Gift Tax.
Will above transaction be an example of Tax Planning or will IT Dept will Tax Mr. X on ground of receiving back gift with allegation of evading tax and apply provisons of clubbing?
Kindly Reply ASAP
Thank You
CAclubindia
