Who pays taxes on interest earned from gifted PPF savings?

My wife's PPF will mature in April. She wants to transfer ₹23 lakh to my senior citizen savings account and the balance ₹7 lakh to our daughter.

- Parizad Sirwalla

What will be the tax implications for all of us? From April, interest will be earned in my name, and I understand that I should and will be liable to pay tax. Please clarify in whose income the interest will be added and whether any clubbing provisions will apply.

—Chander Gupta

If you, your wife and daughter qualify as Indian residents for tax purposes and your daughter is not a minor (18 years or older), the following tax implications will apply to the receipt and transfer of PPF maturity proceeds:

PPF Maturity proceeds: Tax exemptions

The maturity proceeds from Public Provident Fund (PPF), having been funded by your wife, will be exempt from tax in her hands under Section 10(11) of the Income Tax Act.

Taxing gift transfers