Gifting to wife and son: Giving gifts to someone is a very common thing in India. Often, people give gifts to their wives and children on their anniversary or birthday. However, while giving gifts, one should always keep in mind the tax rules. Even if you are giving gifts to your wife and children. Let us tell you that now giving gifts to your family can be expensive. Such rules have been made regarding gifts in income tax, knowing about which you will be stunned. Regarding this, Mumbai tax expert Balwant Jain said that the basis of tax on the amount of the gift depends on who the money has been given to and how it has been used.
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How is tax levied on giving gifts to a wife?
If you gifted money to your wife and she spent it or invested it in non-income things like gold, property, etc., then no tax will have to be paid. But, if the wife generates any income from that money – like depositing it in a bank and earning interest or investing in a mutual fund – then that income will be added to your income and you will be taxed. This is called the clubbing provision. It comes under Section 64.
Tax rules for gifting a son
If the son is an adult, then the gift received by him will be tax-free, and the same son will have to pay tax on the income generated from that money. But if the son is a minor and he gets any income from the gift, then this income will be added to the income of the mother or father who earns more. If the parents live separately, then the income will be added to the income of the parent who takes care of the child.
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Investment is necessary before giving a gift
Balwant Jain advises that before giving a gift, it is important to think about how that money will be used. If there is any income from the gift, then it is important to keep a record of it and show it correctly on the tax return. This will not cause any problem in tax filing, and you will also be able to follow the tax rules.