INTERVIEW QUESTIONS TAX GIFT TAX DETAILS

Question: What are the points to remember as Donor while giving a Gift?

Answer: 1. You don’t pay tax on money gifted to someone.

2. You can’t deduct this value from your income.

3. Income earned from this gift by your unemployed spouse or daughter-in-law alone is clubbed with your income.

4. Further income earned from investment of earned income (from gift) is taxable in hands of receiver alone.

For e.g.: You gift your unemployed wife 2 lakh rupees in March 2015. She gets an FD in her name on 1/4/2015 and earns 10% interest on it. The interest of Rs 20000 will be added to your income for financial year 2015-2016. She reinvests this interest in another FD and gets 9% interest on it for 2015-2016. The amount of interest income of Rs 1800 will be considered your wife’s own income.

In the above e.g.: If you had gifted to unemployed sister, both original interest on gift and subsequent interest will considered your sister’s income and not clubbed with yours.

1. You don’t pay tax on money gifted to someone.

2. You can’t deduct this value from your income.

3. Income earned from this gift by your unemployed spouse or daughter-in-law alone is clubbed with your income.

4. Further income earned from investment of earned income (from gift) is taxable in hands of receiver alone.

For e.g.: You gift your unemployed wife 2 lakh rupees in March 2015. She gets an FD in her name on 1/4/2015 and earns 10% interest on it. The interest of Rs 20000 will be added to your income for financial year 2015-2016. She reinvests this interest in another FD and gets 9% interest on it for 2015-2016. The amount of interest income of Rs 1800 will be considered your wife’s own income.

In the above e.g.: If you had gifted to unemployed sister, both original interest on gift and subsequent interest will considered your sister’s income and not clubbed with yours. Source: CoolInterview.com

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