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Monday, Jun 14, 2010
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I am now 80 years old. I have made a gift of Rs. 20 lakh to my wife, which she had invested partly in Senior Citizens Savings Scheme and partly in fixed deposits. I presume that my wife, being a relative, gift is not taxable. I would also like to know whether the clubbing provisions would continue to be applicable so as to make me liable for the interest amount, which my wife is getting as full owner of deposits in the light of the amendment to law exempting gifts from relatives.
The reader is right that the gift would make the wife the absolute owner of the gifted funds and that such gift would not be taxable, even when such gifts from non-relatives were made taxable from assessment year 2005-06.
Interest income will continue to be clubbed under Sec. 64(1)(ii) of the Act in the hands of the husband for income-tax purposes.
This was the position even when gift tax was in vogue.
Liability or otherwise of gifts deemed or not deemed as income under Sec. 56(2)(v) and (vi), now (vii) makes no difference to the clubbing provisions.
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