Is my understanding correct ?
If I give a gift of Rs. 10 lakhs to my wife (by simply transferring funds from my account to her account), she will not have to pay tax on it. But, any income that she generates by investing this money will be clubbed with my income. However, this money will now be her asset on her balance sheet and will go off my balance sheet.
Alternatively, if I treat the above as a loan, the income she generates by investing this money, will be treated as her income and taxed accordingly. However, the loan will show as "Loan to Wife" on my balance sheet and hence will continue to be my asset.
Correct?
CAclubindia
