Gift to mother

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My father has pension income of 4 lacs per annum.
If I transfer 5 lakh rupees to my mother's account and she earns interest of 20000 from that money in fd.

Then, that 20000 interest income shall be my mother's income or shall clubbed with my fathers income or shall be considered as my income for purpose of taxation.

My father and mother both file their income tax individually. My mother has 0 income every year.

Please suggest...
This is first query

Replies (1)
Interest from fd in mother's name will be taxed in her hands. this is a tax planning method whereby you transfer money from a person who falls in a higher tax bracket to someone who suffer lower rate of tax or no tax at all. such transfer/ gift shall be made in the name of father or mother. clubbing provisions will not be attracted

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