Investing money given by spouse

1)  If I transfer 10 lacs to my spouse's bank a/c & my spouse invests it in FMP's,
do I have to pay income tax on the interest earned ? Who will get benefit of Long Term Capital Loss ?

2)  If my spouse was to invest the money given in REC Tax Free bonds, then what happens ? ?

Thanks in advance to my learned friends who will care to answer.