23 August 2012
Gifts given to relatives are exempt. But, any income that arises out of such income will be taxable in the person who transferred such gifts without any consideration.
e.g: If wife invests Rs.10lacs given as a gift by her husband in a FD, interest on such FD will be taxable in Husband's hands since he has transferred such sum without any consideration
23 August 2012
Dear Srinivas, Clubbing provisions to be more specific sec 64 (1)(iv) is applicable if transfer is without adequate consideration. Natural love is not taken as consideration hence even if deed is registered it will be clubbed in the hands of transferor
23 August 2012
Oh is it? Thanks for the clarification sir. :-)
In this case, what else can we do to avoid taxability? Will it be wise if the husband transfers the money as a loan (with interest) -> wife invests in FD -> pays a nominal amount as interest to her husband?
CAclubindia
