Clubbing Of Income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2010 If I gift a sum of Rs. 1,00,000/- to my wife and she put this amount in 3 years fixed deposit.

In the first year, interest earned on this fixed deposit is taxable in my file.

What about the interest earned on principle amount of Rs. 1,00,000/- in 2nd year? i.e. Other than Interest on interest earned on FD during 1st year.

How the income is taxed in consecutive years, generated on the gift received.?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 October 2010 2nd year also same. Only income earned on interest income will be taxable in her hands/

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CA.Amit Revankar

CA.Amit Revankar (Expert)
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27 October 2010 Interest earned on Rs.100000 for 3 yrs will be clubbed. Furthur interest on interest will not clubbed, becoz second clubbing is excluded by act.

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Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2010 Dear Amit

Do I understand that if she put this money in FD for 10 days and after 10 days re-invest in FD

Now interest earned on re-investment will not be clubbed.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 October 2010 interest earned on income clubbed in your hands will not be clubbed again.

Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2010 Dear Aditya

it's still not very clear to me. Can you explain this with an example? or can we chat? on this subject.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 October 2010 FD Rs. 1 lakhs
Interest earned Rs. 10000/- each year for three years.

That interest income will be clubbed in your hands for all the three years.

Now ur wife invests Rs. 30,000/- and earns income of say Rs. 15,000/-. That income will not be clubbed and taxed in the hands of ur wife.

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CA.Amit Revankar

CA.Amit Revankar (Expert)
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27 October 2010 I think aditya have cleared u r doubt

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