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POSTED BY ON February 12, 2013 2:16 am ONE COMMENT
my father earns 12 lakh per annum. i am major. i study outstation. he gives me 20,000 per month(2.4 lac a year) for rent, house hold expenses etc. can he deduct this 2.4 lac from his income as a gift to his child.Does he need to show proof of this?
Also can i file itr with 2.4 lac as annual income showing some deductions under various sections?
if yes, what source of income i need to show?
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Dear Sonu, your father can gift any amount to you but the tax benefit you are asking for is not possible. The 2.4L Rs. ‘ll remain his income not 9.6L Rs. So he ‘ll be taxed @ 12L Rs.
Interestingly even for you this 2.4L Rs. is not income but capital. The income generated from the investment of this 2.4L Rs. ‘ll be your income & subject to tax if it’s taxable at all.
For example if you are investing those 2.4L Rs. straight forward into a bank RD, the interest received at the maturity ‘ll be taxable but as this interest ‘ll be way below the zero tax limit of 2L Rs., no tax at all for you.
Yes, if you are enrolled in some kind of education course & your father takes loan from a bank or financial institution for this education course, the interest paid by your father on such education loan ‘ll be available for set off against his taxable income.
Thanks
Ashal