| Originally posted by : Abhishek Goel | ||
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Sir I'm transferring only money and my mother is investing that amount in FD, technically.. |  |
Once you make a gift to a close relative ("Relative" as defined in the IT act as close relative BUT other than spouse) then tax liability on income generated on such gifted amount/assets will fall on the the person who received it , no Clubbing provisions of the IT act applicable in this scenario (clubbing provisions applicable only when the gifts are made between "close Relatives" like daughter in law/Mother in law/father in law/spouse) .
BUT important point to note here is that the transfer/gift made should not be a " recoverable/reversible " transfer/gift and should be a "One way" permanent transaction , otherwise the transaction will loose the tag of " GIFT " in eyes of the law triggering a lots of other complex issues .
CAclubindia
