Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Grandmother was to gift her grand child

28 February 2018

My mother wants to gift Rs 30000 to my minor age 2 months old daughter. [ That's her grand daughter ]. I will invest this money in her PPF Account. What will be the tax implication for Grand mother & myself?

Do we require to make a gift deed?
Is this sort of gift allowed? [ Grandmother to Grand daughter ]

Next April onwards my mother wishes to give her grand daughter Rs 150000 as a gift and it will be invested in PPF? Is it allowed without any problem. ? Do we have to make a gift deed, as this amount exceeds Rs 100000/-

Please clarify. I am confused. Thank you.

Reply
Follow
Share

3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (169514 Points)
Replied 28 February 2018

"Is this sort of gift allowed? [Grandmother to Grand daughter]"

YES, no tax liability on either.

"Do we require to make a gift deed?"

Confirmation of gift is always better, even if the amount transferred through banking channel.

"Next April onwards my mother wishes to give her grand daughter Rs 150000 as a gift and it will be invested in PPF? Is it allowed without any problem?"

No gift tax liability, but the total amount invested in your PPF account including your minors' PPF acc. should not exceed 1.50 lakhs.

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

Captain Kumar (self) (89 Points)
Replied 31 July 2018

Dear Sir, This is in reference to your reply some times back to my query. As you had mentioned the total amount invested in your PPF account including your minors' PPF acc. should not exceed 1.50 lakhs.
I wish to ask that Can I invest 1.50 Lakhs in my name & 1.50 lakhs in my child's name & combine child's PPF interest into my income? Can I do this? Please clarify, as it seems a bit confusing. Thank you.