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Taxation

anu (B.Com) (87 Points)

20 February 2014

please answer for this question..

mr.z gifted rs.20,00,000 to his wife.she invested that money in a business along with her own investment of rs. 10,00,000. mrs.z has no other incomes while the business incomes of mr.z for the FY.IS 7,50,000. taxable income of mr.z and mrs.z shall be ???

please find the answer and step should be must.....

help me..plz

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Yash Nakipuria (Student CA ) (39 Points)
Replied 20 February 2014

The clubbing provisions will apply if Mrs. Z invests the amount gifted on the 1st day of P.Y. The income to be clubbed with Mr. Z= (Investment out of fund gifted on the 1st day of P.Y) x (Business income)/ (Total investment on the 1st day of P.Y.) = 7,50,000 x 20,00,000/30,00,000 = 5,00,000. However no clubbing shall be done in current year if Mrs. Z does not invest the gifted amount on the 1st day of P.Y. Thus TI of Mr. Z = 5,00,000 Mrs. Z= 2,50,000