What is the restrict as much as which a father can reward to his son below earnings tax legal guidelines

Please advise if one can provide reward to his son for buy of flat and if sure are there any restrict for such reward below the tax legal guidelines? 

Under the current tax legal guidelines there are not any restrictions on giving reward to any individual. However, in sure circumstances the clubbing provisions apply in respect of earnings derived by the individual receiving from the items. Like for items made to daughter in regulation and one’s partner, the earnings accruing because of the asset transferred is required to be clubbed within the arms of the individual giving the reward. 

As regards incidence of tax on the time of constructing the reward is anxious, as per the Indian tax legal guidelines reward acquired by an individual, typically, change into taxable in his arms in case combination of all of the items acquired by a him throughout a yr exceeds fifty thousand rupees. As lengthy because the sum of all of the items acquired in the course of the yr doesn’t exceed the brink of fifty thousand rupees it’s absolutely exempt however complete of the quantity turns into taxable as soon as it crosses the brink of fifty thousand. However, there are specific exception to the rule of items changing into taxable within the arms of a recipient. One of such exception is in respect of items acquired from sure specified family. The relationship of father and son is roofed below the definition of “specified family”. So a father can provide any quantity of reward to his son with none tax implications for each. Please be aware that as per the current provisions of tax legal guidelines in case an individual accepts any reward past Rs. two lakhs in money, he could change into liable to a penalty equal to the quantity of reward accepted in money. So keep away from accepting items past two lakhs in money.

Balwant Jain is a tax and funding skilled and will be reached on jainbalwant@gmail.com and @jainbalwant on Twitter

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