Interest received on loan given to wife - business income or not ?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 March 2015 A husband had given loan of say Rs. 20 lakhs to his wife. The wife had made f.d. s in her own name, out of that amount rcvd from husband as loan.

Now, the wife has paid the principal loan amount back with interest of around Rs. 2,50,000 to her husband.

Wife had no any other special purpose. of getting this loan from husband. The husband 's purpose to give this loan to wife, was only of making f.d. in her name and receiving that interest from wife back.

Husband does not give loan to anybody often and every year.

Que. 1: Will this interest income received by husband, from his wife , be considered as Business income of husband?
( business of landing money and generating interest income ?)

Que.2: will the husband have to file his income tax return in ITR 4 or 4S , only because of such interest income from wife ?

Every year, husband files return in ITR -1.
He does not have any other business income.
He has only pension income and interest income from his own bank f.d.s and savings bank accounts.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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25 March 2015 This interest income will not form part of business income as the husband does not give loan to anybody often and every year. Will be taxed under the head 'income from other sources'.