Sec 64 will not apply in your case.

what is sec 64 and please answer my one more query here: /forum/messages/2009/4/30732_home_improvement_loan_transasctions.asp

mentioning the source of the gift deed, forms a clear face of the cash flow of the amount. otherwise sometimes in scrutiny cases, the giver of the gift has to prove the source of the gift.. if its mentioned in the deed....the authorities usually donot call for the person making the gift.

Mr. Parathsarthy

What U say is correct source of fund is important . but need not to mention in Gift Deed. The important thing is that Donor Should Gift from his own fund. If U go through my earlier reply U will find that I hav already mention in normal course Father is giving gift to son, not son to father. Once the case is posted for hearing for any person, AO will cross the source of fund, even he may ask copy of bank pass bk. copy of statement of affairs of the Donor filled with IR return. Hence U should use prper word " that I m absolute owner of the gifted amount to Donee. Pl let me know if U find any thing wrong.

Surana, Chennai

9952967237

Mr. Aashish

One of our member Mr. Party has mentioned that If gifted fund is utilised for purchase of  property and your father may hav Rental income in that case it may be added to your income . For that only I mentioned the provision of 64 will not apply. The sec. 64 contains provisions of clubbing og Income, which is not applicable in your case.

Mr. Aashish U can do Gift, but it not look practical  a son gift to father as I mention earlier, . I suggest U alternate. If U r living with father U can give interest free loan, there will not been any problem.  

Surana, Chennai

9952967237

Ok, if i give the amount as loan then in future they also have to returned me back.. which is not going to happen. Then what?

Nothing is wrong. If U r leaving with father that  is consideration for loan also. let it be for long time. No problem. Now U hav to decide which suitable for  U.

If I give a loan then what procedure need to follow (any deed) and how to show that this is loan and not gift, please explain?

Secondly, i have house loan already and in place of making the prepayment and finish that, i am giving loan to my father... so that looks practical and need to mention somewhere for which purpose i am giving a loan?

Mr. Ashish

U need not to creat any document for Loan. U can issue a che. favoring your father name. He will show a loan from U.  U can show in father name under frou Loans & Advances. If U r paying yr. loan in installment, U need not to worry toclear or pre clausre of Loan.Let it go in installment.

what you mean by "Let it go in installment." if i like to preclose?

Mr. Ashish

Normally, HL is payale in installments. U can keep it continue till U settle last installment . No one will quesrion U, unless there is default in repayment. Nobody will ask U  why U r not settling our a/c instead advancing to someone. Further, for preclousre U hav to loose  some percentage.2, U will hav benefit of sec 80C as well for int. from Income from HP.My advise not to close, U should continue and advance to father. If he goes for fresh loan He has to pass through unnecessary formalties and int. rate may be higher.

Will it attract clubbing provision on the income generated from that gift(under indian income tax).Pls advice on this

if U gift to father there is no limit, and it will not attract clubbing provisions.it may look odd only.

I will agree with mega. the whole of such amount is exempt & also u need not file income tax return for the same.

sunil

Dear Ashish, as per the gift provisions of the Act. father is a lineal ascendant and is clearly under the definition of a relative. so you can gift any amount of money to your father either by cash, or kind. no limits and no strings attached. it is a tax free receipt in his hand. however to prove the actual movement of money to him....better use cheque of e-payment and have a gift deed done. it is upto him ..how to spend the money...... he can purhcase any property with it..... the income from tht property will not be clubbed in your income...... gift to relatives is out of the perview of clubbing provision............by the way gift to father is not odd at all...now a days children working in cities do send gifts to their parents......in cash or kind............so.... carry on with your gift and have a nice day.

C.A  T.Parthasarathy