25 July 2011
If a house-wife saves money which she gets from her husband in fixed deposits in Bank, MIS, RD in Post offices in her own name and earns interest on it, will the interest income so earned shall be clubbed in her husband's income? The husband is salaried person and his tax is deducted by the employer at source.
First of all, we will have to determine whether house-wife is having any source of income. If she hasn't, then the question will arise from where does the money come through which she has invested in FD.
It is better to show that the FDs were created through a loan given by her husband to her. In this case, interest income will not be clubbed.
26 July 2011
The clubbing provisions are as prescribed u/s 64. If the husband has given the gift to his wife then the income from the FD shall be taxed in the hands of the husband by way of clubbing. If the wife has earned the income then no clubbing can be done.
Better you show the income of the wife in past few years but do not do it without any source.
CAclubindia
