A father (45) wants to give 30 lakhs for his son's(23) business as capital. What is the best way to avoid tax legally? In whose hands will the amount be taxed if given as gift? If given as loan?
16 Replies
Akash
(CA Final (2nd Group Pending))
(876 Points)
Replied 02 October 2016
Gift from Relative is Exempt from Tax. If its white money then Father can just gift it to son. No tax is payable and there is no clubbing of income as well.
ANKUR TAH
(Teacher Consultant and CA finalist.)
(543 Points)
Replied 03 October 2016
1st- Capital receipt by co is not taxable.
2nd- Gift is exempt from tax.
Father giving his money to his son as gift from his taxable income. That means father has already been paid tax on such amount.
2nd- Gift is exempt from tax.
Father giving his money to his son as gift from his taxable income. That means father has already been paid tax on such amount.
CA Rahul Mor
(Chartered Accountant)
(173 Points)
Replied 03 October 2016
Gift received from father is covered under gift from relative, if gift received from relative even more then Rs 50,000 is not taxable in both the hands. hance tax question not arrise.
shobhit
(aa)
(339 Points)
Replied 03 October 2016
SIR WHAT IS THE PROOF OF THAT ....THAT THE AAMOUNT PAID IS GIFT.....??? IS THERE ANYTHING LIKE GIFT DEED??
CA Rahul Mor
(Chartered Accountant)
(173 Points)
Replied 03 October 2016
yes you have to make a gift deed.
sagar parakh
(Group 2 Cleared)
(317 Points)
Replied 03 October 2016
and what about the income from such asset?
transfer of assets w/o consideration..income from such asset shall not be clubbed?
transfer of assets w/o consideration..income from such asset shall not be clubbed?
CA Rahul Mor
(Chartered Accountant)
(173 Points)
Replied 03 October 2016
Treatment of money transfer by father:-
if the son do some activity and earn some profit from his own practice then it will be taxable in son's hand.
Eample.
1. if son use the capital in the business then it will be taxable in son's hand.
2. if son deposit in FD then the interest will be clube in the father Hand.
CA Rahul Mor
(Chartered Accountant)
(173 Points)
Replied 03 October 2016
Treatment of money transfer by father:-
if the son do some activity and earn some profit from his own practice then it will be taxable in son's hand.
Eample.
1. if son use the capital in the business then it will be taxable in son's hand.
2. if son deposit in FD then the interest will be clube in the father Hand.
sagar parakh
(Group 2 Cleared)
(317 Points)
Replied 03 October 2016
and in case of spouse & son's wife ?
CA Rahul Mor
(Chartered Accountant)
(173 Points)
Replied 03 October 2016
same provision coz both came in definitation of relative.
saurabh kumar
(Tax Consultant)
(348 Points)
Replied 03 October 2016
No provision of clubbing of income shall not apply here and the income from the above asset now will be deemed to be income of the son.
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