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Mutual Fund SIP by Grandmother to granddaughter

Tax queries 627 views 2 replies

I have a query on the folowing issue:

An NRI grandmother wants to make Investment in equity oriented Mutual Fund scheme  in the name of her resident minor granddaughter by way of monthly SIP. The monthly amount of SIP would be around Rs 10,000/-. The minor granddaughter and their parents are based in India.

Now,:

1. Whether any clubbing provision will apply for the SIP transactions both as for gift and capital gains?

2. Whether clubbing will be applicable for grandmother and granddaughter? with parents?

Expecting replies from senior members specific to the query and explanatory in nature.

Regards

Sujit Talukder

Replies (2)

All incomes of minors are clubbed with parents. Gift from grandmother (being relative) is exempt. See section 56.  However capital gains on sale shall be taxed in the hands of parent who has the higher income compared to the other. 

Regards

Sahana Murthy

Sahana is absolutely correct


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