Sorabh Gupta (Manager ( Taxation )) (877 Points)
23 May 2011Hi All,
There is two or three query in my mind which are inter-related.
1) Can i gift of Rs 5 Lacs to my mother. In this regard, i would tranfer my money to my mother's bank account. Then i would invest such money into FD & its interest income shows in my mother return. So Is this tax planning OK ??
2) I would direct invest Rs 5 Lacs in FD on my mother's name & then interest on FD shows in my mother return.
Can you please suggest that which option, i would prefer.??
Thanks
rachit jain
(chartered accountant )
(635 Points)
Replied 24 May 2011
both case are identical the only difference is, in 1st case it is a direct gift and in 2nd case it is an indirect gift. in both the cases interest will be chargable to tax in your hand not in your mother hand
Balaji
(Knowledge Seeker)
(317 Points)
Replied 25 May 2011
A son can gift any amount to his mother and it would be a capital receipt by the mother without any tax implications for either the son or the mother.Mother can invest such amount in F.D.s and the interest earned would be chargeable in her hands only.Option 1 is the correct way to proceed.
Dheeraj
(Learner)
(1100 Points)
Replied 26 May 2011
The best way is to make a gift deed passing money to mother permanently, with no any interest in future..
than the money earned from that amount will be charged to receiver's income i.e mother's income
and hence, it should be shown in mother's income tax return
CA NITUL MEHTA
(KPMG-Senior Consultant-International Tax )
(236 Points)
Replied 26 May 2011
THAT MEANS AN IRROVOCABLE TRANSFER DEED IS TO BE MADE THEN IT WILL BE TAXED TO MOTHER ORELESE IT WILL BE CLUBBED TO YOU AND IF YOU CONVERT THE IRREEVOCABLE DEED TO A REVOCABLE ONE FROM THAT YEAR INCOME WILL BE TAXED TO YOU
CAclubindia
