SC Vasudeva
Q. I have a flat jointly in name with my wife. We wish to gift/transfer this flat in the name of our son. Please guide us the steps to transfer the flat. Also, please advise the tax implications, if any, on the part of donors and/or donee. — S Chandra
A. a) You can gift a flat to your son. This would require an execution of a gift deed which will have to be registered with the Sub-Registrar’s office of the district where the flat is situated. This would also require the payment of stamp duty applicable in the State where the flat is situated. A gift of immoveable property to a blood relation does not attract stamp duty in Punjab and Haryana. You may, therefore, check whether any exemption of the similar type exists in the State where the flat (which is intended to be gifted) is situated.
b) No tax would be payable either by the donee or by the donor in respect of a gift between blood relations.
Q. I am a pensioner aged 75 years. My queries are as under:
My son, a self-employed, had gifted a few lakhs to his mother in the past about 15 years and then migrated to Canada in 2011. From there, he again gifted another Rs 5 lakh in the next 5-6 years to his mother and she put that amount in FDRs gradually whenever she got the money. Now, I want to know the taxability of the interest income from the FDRs. Please clarify whether this is taxable in her name or my son’s name.
2. Secondly, if I gift some money to my married daughter, and she puts it in FDs, whether the interest earned on that amount will be added in her income or my income. Also, how much money can I gift to my grandchildren? — Sardul Singh
A. Your queries are replied hereunder:
a) The amount of interest received on fixed deposits in the name of your wife will be taxable as her income. A gift made by a son to his mother is not taxable in accordance with the provisions of the Income-tax Act 1961 (The Act).
b) The amount of gift to your married daughter would not be taxable as her income under Section 56 of the Act. The amount of interest earned would be included in her total income and such interest would be taxable in case her total income exceeds the maximum amount which is not chargeable to tax.
c) You can gift any amount to your grandchildren without any tax liability either in your hands or in the hands of your grandchildren.
It may, however, be noted that in case your grandchild is minor, the income accruing on such a gifted amount would be included in the taxable income of one of the parents.
Q. (a) Please clarify whether a deduction of Rs 50,000 is allowed on interest income of bank and post office deposit during financial year 2018-19.
(b) What is the retention period of tax records applicable to salaried persons? — GS Kalsey
A. a) Deduction is allowable from the total income of a senior citizen in respect of interest earned on fixed deposit and savings account with the bank or post office under Section 80TTB of the Act for the assessment year 2019-20 relevant to the financial year 2018-19.
b) You should maintain your tax records for a minimum period of seven years. This is because an assessment can be reopened for a period of six years. The sixth year is counted from the end of the assessment year for which the assessment is intended to be reopened e.g. assessment for financial year 2012-13 can be reopened till March 31, 2020.
Q. I am a senior citizen aged 76. I am Central government pensioner and receiving Rs 1,000 per month as medical allowance. Is it taxable? — Sohan Lal Arora
A. A senior citizen is entitled to claim a sum of Rs 50,000 on account of medical expenditure incurred in respect of his health. You can, therefore, claim a deduction from your total income of the aforesaid amount for the assessment year 2019-20 relevant to financial year 2018-19 provided you can prove that expenditure to the extent of Rs 50,000 has been incurred in connection with treatment of heart disease.
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