13 January 2014
Respected Sir, Say X(wife) is the first/primary holder in a joint saving bank account(EITHER OR SURVIVOR) in which Y(husband) is the second holder. Both are self employed professionals .Till date only husband has transferred money from his bank a/c to this joint a/c because he wanted to make payments for property purchase through this joint a/c in order to purchase in joint name. Wife has never deposited her income in this joint a/c. MY QUESTION IS - Can the husband Y treat this bank a/c where his wife is the first holder as his individual bank a/c for the purpose of income tax purposes? Is their some provision in accounting ot IT Rules?
13 January 2014
For income tax purposes, the account belongs to husband Y. It doesn't make difference if his wife is the first holder. He will have to include the interest from this bank account in his taxable income. For income tax purpose, all income earned from investment made through this account will be his income u/s 64(1)(iv).
13 January 2014
Res. Avatar Sir, So husband can show the said joint a/c as his a/c in his ITR without any possible objection from the income tax department? And does that mean that the wife should never deposit her any kind of income in the said joint bank a/c? Please reply Thanks in advance
16 January 2014
Dear Sir, The second part of my last query is unanswered. If suppose husband treats it as his a/c for one or two FYs for tax purpose but in some subsequent year wife by mistake deposits cash in excess of 2 lakhs quoting her pan number then what should be done if this cash is her income from sale of some capital asset.Because in such a case ITR will be send by bank mentioning the name and pan no of wife to the income tax dept.Should the wife rectify the mistake by including the deposited cash of more than 2 lakh in her ITR?
16 January 2014
If the amount has been deposited by wife then husband should issue a cheque in her favour and it should be deposited in her separate account. Wife should take into account this amount in her return.
17 January 2014
Dear Sir, One last related question of academic interest. In the above case say if the husband deposits cash of more than Rs 2 lakh which is his(husband's) income from land sale but mentions the Pan no of his wife(as she is the first holder).Still this cash deposit will be reported in ITR in wife's name. So what is the remedy in this scenario. Because some day wife can get notice about more than two lakh cash deposit not matching with her IT return. How will wife prove that the said deposit is her husbands deposit?
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