issue relating to gift

[BIBIN VARKEY]

A person can transfer a Fixed deposit of Rs.25,00,000/- to his daughter on the occassion of her marriage. (1) Whether it is taxable/ not (2) Whether intrest on fixed deposit is chargaable to tax or (3) whether if interest income is clbbed with her father's income?

[CA Rachit Agarwal]

On account of transfer, interest on fixed deposit will be taxable in the hands of your daughter.

Interest income will not be clubbed in fathers income.

Further transfer should not be of revocable nature.

[rishi mohan]

Sir,

The transfer of fixed asset at the time of marriage shall not be taxable. But interest thereafter received shall be taxable in the hands of the person to whom the asset has been transfered i.e daughter. Interest income shall not be clubbed in the taxable income of the transferor. 

[Guest]

The above mentioned replies are correct as the person to whom transfer is made i.e. the transferee is the daughter who is now married. not a minor or unmarried daughter. so clubbing provisions shall not become applicable. thus, the interest on the Fixed Deposit shall be taxed only in the daughter's hands.

AI Summary

Interest taxation: interest on a fixed deposit transferred to a married daughter is taxable in her hands, not clubbed. A transfer of a fixed deposit to a daughter on her marriage is not taxable; subsequent interest is taxable in the daughter's hands, clubbing provisions do not apply where she is married and not a minor, and the transfer should be genuine and not revocable to ensure the interest is taxed to the transferee.