From my father retirement corpus he transfered 20 lakh to my mother( his wife) .My mother in turn FD that amount for 1 year....after the mature my mother transfered the whole 20 lakh to my father another saving account( other than pension saving account) and then my father invested in SCSS scheme......my question is ...in all these transcation any type of gift deed is mandatory or optional....Note : all transcation are through cheque or online
Dear Sir,
Hope you are doing well !!
Though it is not compulsory to execute a gift deed while gifting any asset, it does create a valid documentary record.
A gift deed ensures proof of such transfer and thus avoids confusions and misuse that may arise in the future.
Husband and wife are fall under the specified list of relatives. So its not required to execute a gift deed between husband and wife. Also the transaction is through Online mode which is traceable.
Gift deed is mandatory only for transfer of Immovable property. This is not necessary in case of transfer of money
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- Draft a gift deed. Also interest on FD will be clubbed in the income of your father with pension income. credit of TDS deducted by bank is available to your father. Also file ITR of your mother and transfer FD interest and TDS to your father PAN. Also in ITR show the gift amount under exempt income schedule.
Gift deed in not mandatory in this case. Amount can also be treated as loan. interest earned by your mother from the FD will be taxable in the hands of your father and not in the hands of your mother.
Gift deed is optional & recommend to draft it
Income on fd will clubbed in your father's income.
It's optional not mandatory as the transaction is between related person.
But it's advisable to have one.
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Thank you
Hello,
It is not mandatory to execute a gift deed. The interest income on FD would be clubbed in the income of your father.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Hii
in your query as per income tax act 1961 clubbing provisions attract and all interest income is taxable in your fathers hand and amount transfer to your mother’s account and return back is not considered as gift you can said this interest free loan which is come back in love thus neighter gift deed required nor loan agreement required
Gift Deedwill be helpful if department raises any question. Although it will not be covered under gift. Whatever income is earned from the FD will be taken in her hands.
Ideally, one can make a gift deed to justify the validity of the transactions. In this case, they can just make a simply agreement and documents to show the giving and receiving the gifts.
The interest earned on 20 lakhs should be shown as taxable income of your father insted of mother. One should show a clear trail of the transfer and receipts.
