Clubbing provision

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 January 2012 Mr X (Husband) gives the gift of Rs.500000 by cheque to Mrs X (w/o Mr X).Mrs X in turn invest the same in fixed deposit and earned the interest on the same.

Whether the interest earned will be clubbed in the income of Mr.X?Under which provision of the Income Tax Act,1961?

sahil jain

sahil jain (Expert)
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13 January 2012 Yes the interest would be clubbed in the income of Mr.X. Section 64 of the Income tax Act says that income derived from money gifted to a spouse will be treated as the income of the giver. It will be clubbed with his (or her) income for the year and taxed accordingly.

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Guest

Guest (Expert)

13 January 2012 Clubbing provision will not be applicable

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sahil jain

sahil jain (Expert)
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14 January 2012 neha can you please explain why the clubbing provision would not be applicable?

Guest

Guest (Expert)

16 January 2012 Gift is not revocable during life time of transferee.