Section 54 - Income tax clubbing

This query is : Resolved

Shilpa Jain (Querist)
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28 June 2008 Husband's(H) gross income is higher than wife's gross income. Wife(W) gives her professionally earned money to Husband (H). H opens FD with bank & invests remaining part of that money in stock markets on his name. Bank deducted TDS with H PAN and all transancation done in stock market are with H PAN.

As the money given by W to H is gift & the money was earned by W with her professional skills, doesn't the section 54 income tax clubbing rule apply here? If yes, then W may be responsible for income tax on invested income. Please note that H's individual gross income is higher than W's individual gross income.

CA Anand Sarda

CA Anand Sarda (Expert)
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28 June 2008 first of all the section is 64 not 54. The point for highest total income matters when the minor income is to be clubbed. and in the given case the husband income which was earned by the amount gift by his wife is to be clubbed with his wife income.