Ashwin (AFP) (93 Points)
17 June 2015If a person gifts 10 lakhs to his brother and the brother invests the amount and earns income of 2.5 lakhs from the gifted amount, what would be the tax treatement of 2.5 lakhs.
Will 2.5 lakhs be clubbed with the income of the person who gifted?
or
is the 2.5 lakhs considered the receivers income, and the brother pays tax on 2.5 lakhs as per his slab.?
Thanks in advance.
Rashi Bajaj
(CA)
(752 Points)
Replied 17 June 2015
Gift from relatives is not taxable. but interest earned from amount invested (Rs. 2.5L) will be taxable in hands of brother. Clubbing provisions are not attracted in this case as there has been no transfer of income while retaining the asset(source of income).
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