Income attribution for gifts follows specific rules in 2025:
Direct Gifts: When you gift money or assets to a family member, any income generated from these gifts is typically attributed back to you for tax purposes.
Key Attribution Rules:
- Gifts to spouse: Income from invested gifts is attributed to the donor
- Gifts to adult children: Income belongs to the child (no attribution)
- Gifts to minor children: Income is attributed to the parent with higher income
- Cross gifts: Income from mutual gifts between spouses may be clubbed
For example, if you gift ₹10 lakhs to your spouse who invests it in fixed deposits, the interest earned will be taxed as your income.