If an person transfers shares to his wife and she sells such shares & buys any Asset which is an asset U/s 2(ea) of wealth tax act, then such asset is taxed in the hands of the wife or in the hands of the husband.
16 May 2009
If the shares are transferred for an inadequate consideration or on an agreement to live apart, then the value of the converted asset on the valuation date is to be clubbed in the hands of the husband.
17 May 2009
Thanks for your reply,however on my repeated reading of Section 4 (1)(a), I am under the Impression that, on the date of transfer of asset (ie., Shares) to my wife, the shares are not asset u/s 2(ea), but only after I have transfered the shares to my wife, she has sold the shares and bought the asset which is comming within section 2(ea), and in section 4(1)(a) the words "such asset" has been used. Otherwise to say I have transfered the shares which is not an asset u/s 2(ea) hence the liability to tax does not arise.
CAclubindia
