Loan to spouse - tax implication

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2015 A. I am giving a cheque of Rs.5 lakhs to my spouse to purchase a property. Should I create any other instrument to prove (to the IT department) that I have lent a sum, such as promissory note?

B. In the interregnum, before investing in Property, my spouse invests in Bank FD. What are Tax implications relating to interest earned to me as well as to my spouse?

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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06 January 2015 Why you taking route of loan and advance, for this transaction, you can directly transfer amount as gift to spouse. Gift to relatives have no Tax implication at all.

Mohit Singla

Mohit Singla (Expert)
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06 January 2015 The only tax implication is that if any income arise to your spouse, same will be clubbed in you income and than tax would be computed on total income of your and your spouse.

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Querist : Anonymous

Querist : Anonymous (Querist)

18 January 2015 Thank you Mr.KumarMukesh and Mr.Mohit Singla.
My spouse is having independent income and when she takes a loan from me and interest income on investment (for a brief period) of the loan received should be clubbed with her income. Why should it be clubbed with the income of the lender(me) ? (Because it is not a Gift) Can you please clarify.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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19 January 2015 No You are Incorrect, In case of Property, including cash is transferred to spouse without adequate consideration or have an agreement for live apart then income arising from such property shall be included in the hands of transferor as per section 64 of Income Tax Act 1961

Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2019 Why can't the husband give a loan to the spouse, executing a promissory note; the loan carrying a nominal rate of interest; as and when the spouse pays interest to the husband, such interest will be the income of the husband. If it is a gift, the interest earned on the amount invested by the recipient will be clubbed with the income of the person who has gifted the money. Experts in this line may give their opinion please...