Income Tax Rule: If money is given to son then no tax will be levied and if it is given to daughter-in-law then tax will have to be paid..

Income tax rules are not considered so complicated without any reason. It is not easy to understand the provisions applicable to it without an expert. Now, take the example of gift rules. Under this income tax rule, if a father gifts property to his son, then there will be no tax on it, whereas if the same money is given to the daughter-in-law, then there will be a tax liability on it. This provision of income tax has been made regarding giving and taking gifts between relationships.

Under this rule, the question is whether a father can gift Rs 20 lakh to his son and daughter-in-law to buy a property. If a brother gives the same money to his sister or a sister gives it to her brother, then how will the tax rules apply to it? Under section 56(2)(x) of the Income Tax Act, tax is determined on such amount. This income tax rule also applies to clubbing.

What are the rules for giving money to the son?

Suppose a father has gifted Rs 20 lakh to his son or daughter-in-law to buy a property, then the tax provisions on it depend on the nature of the transaction and the relationship between them. If this money is given without any specific purpose, then this amount will be considered as 'income from other sources' for the giver. However, if this amount is transferred to buy property and the son or daughter-in-law has used it to buy property for themselves, then under section 56(2)(x) of Income Tax, this amount will be considered completely tax-free.

When will this amount be taxed?

If the father has given money to the son or daughter-in-law only for expenses, then the clubbing rule will apply to it. This means that this amount will be added to the income of the giver. The government has implemented the income clubbing rule because many people transfer their income to other family members to save tax. In such a case, the government has implemented the income clubbing rule. Apart from this, if any income is generated from the money given as a gift, then tax will also be levied on the amount of that income.

What is the rule regarding brother and sister?

Such transactions between brother and sister are completely outside the scope of income tax. Under Section 56(2)(x) of Income Tax, a brother and sister have been included in the definition of relative. Therefore, if a brother gifts Rs 20 lakh to his sister, then no tax will be applicable on it. Similarly, money given by the sister to the brother will also not be taxed, unless any taxable income is generated from that money. If this happens, then it will be added to the income of the person giving the money and tax will be levied.

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