I am an Indian citizen and tax resident. I regularly transfer money to both my senior citizen parents to their individual bank accounts. Is there any tax incidence on me and/or my parents due to this? Since they don’t spend much, they keep the balance money in their savings accounts each month. If my parents open bank FDs later (once their savings grow in size), will the interest income accrue to me or my parents?

Roy Bahadur

Funds gifted by child to parents is not taxable, as it is between specified relatives, under Section 56(2)(x) of the Income-Tax Act, 1961. Hence, there are no tax implications on the transfer to your parents. Further, the interest income that your parents might earn is taxable in their hands and clubbing provisions do not apply in this scenario. Considering that they are senior citizens, Form 15H may be submitted if their total income is below the taxable limit. If any tax is deducted on such income, they can claim it in their tax returns and claim refund, if applicable.

These tax positions remain unchanged even under the new Income-Tax Act, 2025.

The writer is Partner, Deloitte India

Published on February 28, 2026