INTERVIEW QUESTIONS TAX GIFT TAX DETAILS

Question: Rules for clubbing of gift income?

Answer: 1. Cash or asset gifted by individual to their spouse is exempt from gift tax, but any income earned from this gift in the form of interest or house rent is taxable. The spouse is charged for such earnings from gift, if they have taxable income or the income is clubbed with that of donor.

2. Similarly, if a father-in-law transfers cash or asset as gift to daughter-in-law, any income earned from this gift will either be taxable in her hands or clubbed with father-in-law’s income.

3. This rule is applicable to NRI in respect on income earned from gifts given by them to spouse or daughter-in-law.

1. Cash or asset gifted by individual to their spouse is exempt from gift tax, but any income earned from this gift in the form of interest or house rent is taxable. The spouse is charged for such earnings from gift, if they have taxable income or the income is clubbed with that of donor.

2. Similarly, if a father-in-law transfers cash or asset as gift to daughter-in-law, any income earned from this gift will either be taxable in her hands or clubbed with father-in-law’s income.

3. This rule is applicable to NRI in respect on income earned from gifts given by them to spouse or daughter-in-law. Source: CoolInterview.com

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