LETS SAY A MAJOR (ABOVE 18 YRS ) GIRL'S FATHER FALL IN 30% SLAB AND HE WANTS TO TRANSFER ABOUT Rs.400000/- IN HER BANK A/C & MAKE FD OF THAT MONEY FOR HER FUTURE NEEDS LIKE STUDY, MARRIAGE,.... ALSO GIRL WILL FILL FORM 15G. MY DOUBT IS WHETHER , IT SHALL BE SEEN AS TAX EVASION DONE BY FATHER IN EYES OF LAW? (GENUINLY FATHER'S INTENTION IS NOT FOR TAX EVASION)
10 Replies
S. Shiroor
(Others)
(1207 Points)
Replied 07 September 2015
If the father has paid tax on 400000 then it will not be taxed in the hands of daughter.
The int on 4lk will taxed in the hands of daughter if she is major - otherwise it will clubbed with father - I think.
sonu singh
(accountant)
(58 Points)
Replied 08 September 2015
i know about clubbing provisions...,my qsn is whether father's act as above shall be seen as tax evasion or tax planning?
Ranjan Sahoo
(Student CA Final )
(25 Points)
Replied 08 September 2015
Amount is clubbed in the hand of father.
S. Shiroor
(Others)
(1207 Points)
Replied 08 September 2015
iT WILL BE SEEN AS EVASION IF 4lk is not taxed in the hands of father.
Post taxed income should be gifted.
if daughter is major then Father can give salary to Daughter and take as expenses.
But then daughter has to file IT return.
sonu singh
(accountant)
(58 Points)
Replied 08 September 2015
4lk is post taxed income and after transfer of sum the interest income earned on it, will not club to father as she is major child & also her total income is less than 2.5lk,she is filing form 15G for not deduction of tds on interest earned. So this is the whole case.
I think there is no tax evasion or may be it can be treated as tax planning. What's your comments ????
S. Shiroor
(Others)
(1207 Points)
Replied 08 September 2015
it is not Tax Evasion . But it comes under Gift Tax. Gift to a blood reltive is tax free.
Since it post Tax income nothing to worry as such. it is does not come under Tax planning also as you are not saving tax by investing somewhere.
Rashi Bajaj
(CA)
(752 Points)
Replied 08 September 2015
It is neiter tax evasion, nor tax planning. the amount given to daughter was initially a taxable income of fater on which he has to pay tax. Gift to daughter is tax free and since she is major, no clubbing provisions apply.
If the father has already paid tax on his income, he can sit and relax..
Miss Rinkal
(Student)
(1309 Points)
Replied 08 September 2015
I agree with Rashi. Also documentation needs to be done so that it can be used at a future date
sonu singh
(accountant)
(58 Points)
Replied 09 September 2015
thanks for your help everyone
thank you
CA.Deepu Rani Bisht
(Chartered Accountant)
(26 Points)
Replied 09 September 2015
4lakh taxed in the hands of father bt exempt in the hands of doughter under gift tax act,
but income on such amt is tax in the hands of doughter nt father bcz dougher is major.
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