Clubbing of Income

I rcvd rs. 20 lakh 4m my father through cheque for doing biz. will the income generated from this amount will be clubbed in my father's salary.

Thanks & Regards

asked Mar 02 '11 at 03:37 by aa_enigma_zz 1333

You can treat this amount as Gift from father and then income on this won't be taxable in hands of father. All tax will be payable in hands of son in this case.

Gifts from relatives is also exempt from income tax, so there won't be any tax on 20 lakhs received too.

answered Mar 02 '11 at 08:22 by Pankaj Batra 5.2k320

Sir, By transfering this amount to me, is he not reducing his tax bracket. Thanks & Regards
(Mar 02 '11 at 11:38) aa_enigma_zz
he still will have to pay taxes on his income. After tax payment, he may have savings, from which he can gift amount to you.
(Mar 02 '11 at 11:42) Pankaj Batra
Sir, He gave me this amount from his savings. From this savings , he was getting the interest amount , which eventually was adding up to his annual income. My ques is, by transfering this amount, is he not lowering his tax bracket. Thanks & Regards
(Mar 02 '11 at 12:24) aa_enigma_zz
If he is not having amount now, there won't be any interest amount in future. All interest earned before giving you the amount, will be taxable.
(Mar 02 '11 at 12:29) Pankaj Batra
Sir, But ultimately by doing this, he is reducing his tax liability by reducing his tax bracket. Thanks & Regards
(Mar 02 '11 at 12:44) aa_enigma_zz

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Asked: Mar 02 '11 at 03:37

Seen: 1,649 times

Last updated: Mar 02 '11 at 12:44