Gifting A Fixed Amount To Senior Citizen Parents Saves Tax?

Since you both have availed the loan, the bank is justified in issuing a combined certificate. Regarding your question about the ratio in which to claim the tax benefits, it has to be claimed in the ratio in which you both are servicing the home loan, which can be different from your share in the property. It may also happen that one of you might have contributed fully toward his/her share of the down payment, and the other must have contributed in the form of a full loan or partly with a loan and partly with a contribution to the down payment. It is advisable to enter into an MOU outlining the respective share in the loan to avoid any future complications at the time of income tax assessment for taxation of capital gains. Please note that deduction for home loan repayment under section 80C and for interest for self-occupied house is available only if you opt for the old tax regime and not under the new tax regime.

Generally, gifts are taxable in the hands of the recipient if the aggregate of all the gifts received during the year exceeds Rs. 50,000/-, but gifts received from specified relatives are not to be treated as income. A son is included in the definition of specified relatives; your parents will not have to pay any tax on the amount of gift they receive from you. However, there is no provision for granting any tax benefits to the person making the gift so you cannot take any tax benefit in respect of money gifted to your parents. A gift is considered an application of income.

As per the existing provisions, an individual is required to file their ITR if the aggregate of all the taxable income exceeds the amount of basic exemption before giving effect to various deductions under Chapter VIA and various capital gains exemptions. The basic exemption applicable for those below 60 years is Rs. 2.50 lakhs, and for those between 60 and 80 years, and those over 80 years is Rs. 3 lakhs and Rs. 5 lakhs respectively if you opt for the old tax regime. For those opting for the new tax regime, the uniform exemption limit is 3 3lakhs. As your net taxable income of 4 lakhs is higher than the exemption limit after the deduction and exemption, you have to file your ITR. However, you may not have to pay any tax due to rebate available under section 87A.