When you are planning to give gift to some person then there are no restrictions under the current tax laws. However, in some of the cases clubbing provisions apply with regards to the income derived by the person receiving from the gifts. For example gifts that are made to daughter in law and one’s spouse, the income accruing due to the asset transferred is required to be clubbed in the hands of the person giving the gift.
With regards to the incidence of tax at the time of gifting is concerned, according to the Indian tax laws gift that are received by a person, generally, become taxable in his hands in case aggregate of all the gifts received by a him during a year exceeds fifty thousand rupees. If the person receiving the gifts during the year exceeds fifty thousand rupees then it will be taxable.
But there also some exception to the rule of gifts becoming taxable in the hands of a recipient. One of the example of exception is with regards to gifts received from certain specified relatives. When it come to relation of father and son, then this relationship is covered under the definition of “specified relatives".
Therefore, a father can gift any amount to his son and it wont be taxable for both the parties. However according to current provisions of tax laws, if a person accepts any gift that more than 2 lakh in cash, he or she might have to pay a penalty that would be equal to the amount of gift accepted in cash. Therefore, it is recommeded to avoid accepting gifts beyond two lakhs in cash.