Regarding geeft deed

drpkkhatri (Querist) 23 May 2011 This query is : Resolved
I am a Doctor in Govt.Hopital non practicing.I am a taxpayer. After paying tax,can I give money to my children and wife i.e.to invest in their names.Would it be a legal one?How much amount can I give them per year leagaly? or Should I make a gift deed if yes what is the draft ?

Follow Query

Report Abuse

R.Ramachandran (Expert) 23 May 2011
I assume your children are minors.
There is no doubt you can give gift to them for investment in their names. But whatever income that comes out of that investment would continue to be clubbed into your income and liable to tax.

Arun Bhatia (Expert) 23 May 2011
Sir,
I agree with Mr R.Ramachandran but you can give a intrest free loan to your wife. Than the borrowed funds can be invested by your wife and the income therefrom will not be clubbed with your income.

Guest (Expert) 24 May 2011
You can gift any amount to your children out of your income, but till they are minor, their income would be considered your own income. But, since you have already accounted for that income that may not make any difference in your income or your children's income, as their gift, whether clubbed with your income or not.

However, any profit on that income out of the investment instruments would be treated as your own income to be taxed on your part till they are minor.