Clubbing of Income

This query is : Resolved

Sunil (Querist)
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06 April 2010 Mr. X retired on 30th Oct, 2009 from govt. job. He got Rs.900000/- of PF, out of this he invested Rs. 450000/- in MIS of post office in his name and Rs. 450000/- in the name of his wife.He paid cheque of Rs.450000/- directly to post office for investing in his wife name.
Now the query is whether monthly income of Rs.3000/-pm of his wife will be clubbed in the income of Mr. X or not?
Can this Rs.450000/- be taken as gift to relative ?

Sohil Ganeriwala

Sohil Ganeriwala (Expert)
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06 April 2010 No it cannot be considered as gift and the income will be taxable in the hands of Mr.X because:
as per sec 64(1)(iv) - in computing total income if an individual, all such income as arises directly or indirectly to the spouse of such individual from assets (other than house property)transfered directly or indirectly to the spouse of such individual otherwise than for adequate consideration or in connection with an agreement to live apart.