Gift tax
This query is : Resolved
13 July 2013
if anyone gift her wife rs 30,00,000/- , she put the amount in fixed deposit and earn interest on fixed deposit , bank already deducted tds on fixed deposit intrest , will noth husband and wife need to file itr , and who will show the bank interest in their ITR
13 July 2013
THE HUSBAND HAS TO SHOW THE INCOME AS WELL AS THE TDS ON THE INCOME.
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13 July 2013
Thanks sir for your reply , but i want to understand the bank has deducted tds on wife pan , can husband can take the benefit
13 July 2013
I dont think husband can claim the TDS in his file.
Paras Sir please throw light on how can husband claim the TDS and where in ITR sheet can he show and clim the TDS of wife?
Paras Sir please throw light on how can husband claim the TDS and where in ITR sheet can he show and clim the TDS of wife?
14 July 2013
1. In the backdrop; the wife is really "lucky" to have such a huge amount as a gift.
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2. In the instant case:-
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i) The husband has to pay tax whatever is due after clubbing the income to his wife.
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ii) The wife will claim a refund for TDS.
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3. Tax planning :
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The wife may apply for nil tax/low deduction of tax certificate; if required.
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2. In the instant case:-
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i) The husband has to pay tax whatever is due after clubbing the income to his wife.
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ii) The wife will claim a refund for TDS.
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3. Tax planning :
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The wife may apply for nil tax/low deduction of tax certificate; if required.
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14 July 2013
The Wife will file return and claim refund of TDS.
Surender Sir my question is She will show TDS in TDS sheet. But where she will show the interest amount and where will she show that the Income has already been clubbed with her husbands income and tax has also been paid by her husband so that her taxable income comes to NIL and she gets refund of TDS?
Surender Sir my question is She will show TDS in TDS sheet. But where she will show the interest amount and where will she show that the Income has already been clubbed with her husbands income and tax has also been paid by her husband so that her taxable income comes to NIL and she gets refund of TDS?
14 July 2013
Yes, she has to show TDS in her return without showing any interest earned.
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(Income from other sources : Interest earned less interest clubbed in husband's income = nil)
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(Income from other sources : Interest earned less interest clubbed in husband's income = nil)
14 July 2013
Sir will not deparment raise a query or demand when they see that TDS is claimed as refund without showing any income whatsoever?
14 July 2013
The way out which I feel appropriate is -
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In the income tax return of husband the income subject to clubbing provision is shown in Schedule OS against item No 3-
3.Income from other sources (other than from owning race horses).
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For getting the TDS credit one ( this "one" is always a HUSBAND) must has to be alert
in advance in such situations.
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W.E.F. 1-11-2011, fortunately clause (i) of Rule 37BA(2) has been amended which deals with particular cases where credit of tax deducted is given to a person other than the deductee.
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The deductee files a declaration with the deductor and the deductor reports TDS in other person's name.
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For more details please refer Rule 37BA.
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In the income tax return of husband the income subject to clubbing provision is shown in Schedule OS against item No 3-
3.Income from other sources (other than from owning race horses).
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For getting the TDS credit one ( this "one" is always a HUSBAND) must has to be alert
in advance in such situations.
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W.E.F. 1-11-2011, fortunately clause (i) of Rule 37BA(2) has been amended which deals with particular cases where credit of tax deducted is given to a person other than the deductee.
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The deductee files a declaration with the deductor and the deductor reports TDS in other person's name.
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For more details please refer Rule 37BA.
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14 July 2013
Completely agree Paras Sir but now that TDS has been deducted from wife and deposited under her PAN. How can husband claim that in his ITR?
If wife claims in her ITR without showing the interest than demand may be raised by IT Department in intimation u/s 143(1). And then the exact situation will have to be explained.
I thing 2nd one is the only way out in the instant case.
If wife claims in her ITR without showing the interest than demand may be raised by IT Department in intimation u/s 143(1). And then the exact situation will have to be explained.
I thing 2nd one is the only way out in the instant case.
14 July 2013
First of all, such decisions are taken by the clients out-rightly. The consultants are contacted later.
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My reply was for the information of the members and users of this Forum. I know that things can't be revert back though, it may help to take corrective action to the concerned party for the future.
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In the present scenario- I would like to appreciate the advise of CA Surendra
Rakhecha to claim TDS with NIL income.
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Show the income in the wife's return and claim the same as expenditure.
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In the defective or non-fitting ITR format you can show it under Schedule OS Item No 1(b). Interest Gross; and Claim Deduction against Item No f(i) Expenses/ Deductions;
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The assessee has to give explanation the AO in case asked.
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My reply was for the information of the members and users of this Forum. I know that things can't be revert back though, it may help to take corrective action to the concerned party for the future.
.
In the present scenario- I would like to appreciate the advise of CA Surendra
Rakhecha to claim TDS with NIL income.
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Show the income in the wife's return and claim the same as expenditure.
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In the defective or non-fitting ITR format you can show it under Schedule OS Item No 1(b). Interest Gross; and Claim Deduction against Item No f(i) Expenses/ Deductions;
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The assessee has to give explanation the AO in case asked.
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14 July 2013
I think clubbing provisions will not apply in that case since this transaction come under section 56 & wife is relative. therefore wife should disclosed interest income in her ROI & accordingly she can claim TDS
and this treatment can digestible by other Experts
waiting for replys
and this treatment can digestible by other Experts
waiting for replys
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14 July 2013
Gift to a relative is not covered under IFOS u/s 56.
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The query is regarding interest income earned out of that gift. Hence clubbing provisions are applicable.
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The query is regarding interest income earned out of that gift. Hence clubbing provisions are applicable.
14 July 2013
In my view, it is not important here to give a digestible opinion. An amicable solution may be accepted by the "Experts" but not by the AOs.
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(Do not derive from the above that AOs are not expert. I have great regards for those AOs who have brought cases for adjudication
in various tribunals and courts for the benefit of revenue.)
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Section 56 decides whether the said receipt is income or not.
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Section 64 goes one step further. It talks about income emanating from such receipts.
. The income may be directly or indirectly arising. The intention of statute is very clear.
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Section 64(1) (iv) starts as ...subject to provisions of section 27....(House Property Income) . It could have adopted the reference to Section 56 also.
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The work (discussion) is still in progress till the final verdict.
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(Do not derive from the above that AOs are not expert. I have great regards for those AOs who have brought cases for adjudication
in various tribunals and courts for the benefit of revenue.)
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Section 56 decides whether the said receipt is income or not.
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Section 64 goes one step further. It talks about income emanating from such receipts.
. The income may be directly or indirectly arising. The intention of statute is very clear.
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Section 64(1) (iv) starts as ...subject to provisions of section 27....(House Property Income) . It could have adopted the reference to Section 56 also.
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The work (discussion) is still in progress till the final verdict.
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15 July 2013
thanks for your reply , if husband show this amount as loan to his wife then what is the treatment in income tax for interest earned on fixed deposit
16 July 2013
A never ending query....further it may be asked what if 40% is treated as loan and 60% as gift...:)
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and what if husband charges interest @ 15% (fdr interest is 8-9%) and what if he doesn't charge...:) :)
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First of all; tear off the gift deed into pieces if it is not attested so far.
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Now you can say husband has not given gift and has made a loan :
1. If it is interest free : the interest will be clubbed in his income
2. If he charges interest from wife; income will be taxable in his hands.
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Wife's income will still be NIL..i.e...interest earned - interest paid to husband
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Raising one query to you (shuruaat tumhi ne ki thi) :)
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Whether the husband has made a GIFT DEED so far?
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If no; what do you think about the case if you select to show it as a gift?
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and what if husband charges interest @ 15% (fdr interest is 8-9%) and what if he doesn't charge...:) :)
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First of all; tear off the gift deed into pieces if it is not attested so far.
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Now you can say husband has not given gift and has made a loan :
1. If it is interest free : the interest will be clubbed in his income
2. If he charges interest from wife; income will be taxable in his hands.
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Wife's income will still be NIL..i.e...interest earned - interest paid to husband
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Raising one query to you (shuruaat tumhi ne ki thi) :)
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Whether the husband has made a GIFT DEED so far?
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If no; what do you think about the case if you select to show it as a gift?
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16 July 2013
Thanks for your reply sir, i raised loan query only because husband has not made gife deed so far , i perfectly get that interest from fixed deposit that wife earn ( gift from husband), husband has to pay the tax after clubbing interest income in his account., but what will be done on tds that bank has deducted on fixed deposit interest on wife pan, **on that particular amount(fixed deposit interest) 10% was already deducted, but husband can not claim that tds amount in his ITR ( it means govt. got two times tax on the same amount)
18 July 2013
Govt is interested in revenue collection, but its intention about single taxation only is very clear. So file the returns of both the parties as discussed and claim refund in wife's return. The investor has to pay for the wrong decisions, thankfully, it is in terms of interest only.
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18 July 2013
"But",.....
as I said earlier; it is never ending query.
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@ Neeraj,
Better you hand-over the case to one Income Tax expert if you can't absorb that :-
1. Nil Interest earned by wife
(Interest earned from bank minus Int. paid to husband
or
clubbed in his hands).
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2. If still you couldn't understand, read s-l-o-w-l-y point in 1 again(till it is understood).
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But,.... you should not forget what I have suggested in my first reply - regarding claim of refund by wife.
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as I said earlier; it is never ending query.
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@ Neeraj,
Better you hand-over the case to one Income Tax expert if you can't absorb that :-
1. Nil Interest earned by wife
(Interest earned from bank minus Int. paid to husband
or
clubbed in his hands).
.
.
2. If still you couldn't understand, read s-l-o-w-l-y point in 1 again(till it is understood).
.
.
But,.... you should not forget what I have suggested in my first reply - regarding claim of refund by wife.
.
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