Muhammad Nazim (Chartered Accountant) (86 Points)
24 July 2010
Dear sir
One of my client pay annual premium from his bank account and police also in the name of husband but at the time when police will be mature all amount will be deposit in the account of her wife as per police norm.
Please suggest me how I deal that situation and what will be tax treatment in the hand of husband & wife because that mature amount is not exempt .
Balaji
(Knowledge Seeker)
(317 Points)
Replied 24 July 2010
Dear Nazim,
Clubbing provisions will be attracted in this case.Though the maturity amount is credited to the wife's A/c,the annual premiums have been paid from the husband's A/c and he is the beneficial owner of the investment.
Further,any income earned by the wife from the maturity amount would also be clubbed with the income of the husband.
However,any further income earned on that income would be taxable in the hands of the wife only and would not be clubbed with the husband's income.
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 24 July 2010
fully agreed with balaji
Regards,
Manoj
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