New Delhi, July 19 -- -Name withheld on request

A gift from a parent to a child or any relative (as defined in the law) does not result in any income-tax consequences and is exempt from tax. Accordingly, your gift of Rs.5 lakh to your son does not give rise to any tax liability for either you or your son at the time of making or receiving the gift.

In respect of any income earned by the child from any investment made out of the said gift, the tax liability, if any, would arise in the hands of the child and not the parent. Interest earned in an NRE account by an individual who is a person resident outside India under FEMA would be exempt from tax. Assuming your son is a non-resident under FEMA as well, the interest earned by him would be...