The person who gives the gift can never claim any income tax deduction or exemption from his/her income
04-Apr-2017 •Research Desk
My annual income is 12 lakhs. I am aware that gifting money to the parents & parents in law doesn't have any tax implication. However, am I liable to pay a tax for the income generated from the gifted money? Will clubbing provision be applicable in this method?
The money you gift to your parents/parents-in-law will not be taxable in their hands. But any income generated from the gifted money is taxable in their hands, not yours. Therefore, they need to club such income with their other earnings, if any, and pay tax as per the slab system.