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Income on gift to spouse by book entry

1477 views 2 replies

Arun Kumar Aggarwal

Service

65 Points Joined October 2007

Dear All,

Mr. X is having MIS and Kisan vikas patra in his name. To divert Interest income, he Gifted these MIS & KVP to his wife by book entry without getting the actual endorsement through the Post Office. Can he diverts his income like this.

CA. A. K. Aggarwal

Replies (2)

CA. O.P. Agarwalla

C.A.

2916 Points Joined November 2007

Please refer section 64(1)(iv). Income from assets trfd to spouse otherwise than for adequate consdiration will be added to the income of the transferor.

Ashish M

Chartered Accountant

2731 Points Joined January 2008

In my opinion, tansfering an asset merely by book entry without actually getting it tranfered legally doesn't amt. to valid transfer at all. hence, to the best of my knowledge, interest income can't be transfered this way.