Gift & diversion or application of gift

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 March 2014 A Student who secured 1st rank in C.A Final received a total cash gift of Rs. 15lacs from his state government,Institute and from his coaching center.Is this gift is taxable?
However the gift received by him was deposited in a bank as a fixed deposit in the name of his sister for his sister's marriage.Now, the interest received on F.D is taxable in the hands of whom? can he deposit the gift received by him in the name of his sister?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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04 March 2014 1. The gift is taxable u/s 56(2)(vii).
2. Interest on FD will NOT be clubbed. It will taxable in the hands of the sister.
3. There is NO restriction on making fixed deposit in the name of his sister.

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