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What is the tax implication on gift money received from parents?
Money received from parents as gift does not attract tax
15-Dec-2016 •Research Desk
If a mother, who is a tax-payer, gifts Rs 3 lakh to her son, what will be the tax implications for the son in respect of the gifted amount as well as the income earned from it?
-Haradhan Mukhopadhyay
Parents can gift any amount of money out of their taxable income to their children without any tax implication on the children. Parents and children falls under the specified list of 'relatives' who are exempt under the Income Tax Act as recipients of gift money. Therefore, in the example you have cited, the son will not have to pay any tax on the Rs 3 lakh gift amount. However, he will be liable to pay tax on any income derived from it. For further details on taxation of gift money, you can read our story Tax on gifts received depends on value, occasion.
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