Quick-Serve Blog

Amit asked, Dear Mr. Girdher, I want to know how one can save tax other than 80C, i hv read an article that by gifting to ur parents can save tax. As i am sending my parents approx. 5000 rupees per month in cash can i get the rebate on this? how? and if yes wether i hv to fill ITR for my parents and if cash can be considered as gift or should i send Cheque or DD? what is the limit of this gift?

Sushil Girdher answers, Gift made to relatives is not taxable in the hands of the receiver of the gift. But you would need to understand the essence of gift concept; a regular stream of payments would be difficult to prove that it carries the nature of gift. One time / periodic payments could definitely be considered for the purpose of gift. You would not get any deduction or rebate for such gift as it merely is application of income. You would need to file the returns of your parents only if they have any taxable income and as gift to your parent is not taxable there seems to be no need to file their returns.