Clubbing of income
This query is : Resolved
Kamaldeep Singh
(Querist)
04 August 2013
Dear experts,
Please help me with a problem.
This has been an issue about which I haven't got any clarity since a couple of yrs. Suppose a person gifts rs. 60000 cash to his major son who further invests it on fdr. Now what wud be the tax implication.
1)Is Rs. 60000 is fully exempt in son's hand as it is a gift u/s 56 from a relative and there is no burden on father either ?
2)Is interest on fdr is taxable in son's hands? As from reading clubbing provisions I didnt find any clause explaining the treatment of transfer of funds by Father/Mother to a major child.
Please clear the issue.
Thanks.
Please help me with a problem.
This has been an issue about which I haven't got any clarity since a couple of yrs. Suppose a person gifts rs. 60000 cash to his major son who further invests it on fdr. Now what wud be the tax implication.
1)Is Rs. 60000 is fully exempt in son's hand as it is a gift u/s 56 from a relative and there is no burden on father either ?
2)Is interest on fdr is taxable in son's hands? As from reading clubbing provisions I didnt find any clause explaining the treatment of transfer of funds by Father/Mother to a major child.
Please clear the issue.
Thanks.
08 August 2013
Clubbing provisions are NOT applicable when asset is transferred to a MAJOR son.
Accordingly, there is no tax liability in the hands of the father at any stage.
The gift is not taxable in the hands of the son as it is exempt u/s 56(2)(vii).
Income from FD will be taxable in the hands of the son only.
Accordingly, there is no tax liability in the hands of the father at any stage.
The gift is not taxable in the hands of the son as it is exempt u/s 56(2)(vii).
Income from FD will be taxable in the hands of the son only.
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