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Doubt

Tripti Agrawal (Gurgaon) (24 Points)

17 March 2016

If I earn 1200000 pa in which rs 350000 make fixed deposite name of my wife which is non earning then what is the tax treatment of interest income which is earn through fd...

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4 Replies

CA PAVAN S JOSHI (Practising Chartered Accountant) (222 Points)
Replied 17 March 2016

Hii Tripti

As Fixed Deposite is from your(Husband) Income it will be clubbed in the hands of husband Income as per Clubbing of income Provision

Amit Kanunga (Article Assistant and Post Gradute) (644 Points)
Replied 17 March 2016

Originally posted by : tripti
	If I earn 1200000 pa in which rs 350000 make fixed deposite name of my wife which is non earning then what is the tax treatment of interest income which is earn through fd...

Money is Invested in Shares or Fixed Deposits or other Assets–

The shares may have been purchased in your wife’s name or fixed deposits made in her account – but the income from such fixed deposits or gains from the wife’s shares transactions shall be clubbed with your income. As per clubbing provisions of Income Tax, this is considered as your own income and taxed at slab ratesapplicable to you. Even if there are capital losses from sale, those get added too.

CA Neha Gupta (Managing Partner LNG & Associates) (1839 Points)
Replied 17 March 2016

You are making Fixed Deposits from your income and wife is in non taxable bracket. It means she is exempt from income tax and income on F.D. will be exempt in her hands. But the provisions of IT Act are clear regarding clubbing of income. That means income which is exempt in her hands made out of your assets will be clubbed in your income. You are left with no option but to pay the tax.

Amit Kanunga (Article Assistant and Post Gradute) (644 Points)
Replied 17 March 2016

Originally posted by : CA. Neha Gupta
	You are making Fixed Deposits from your income and wife is in non taxable bracket. It means she is exempt from income tax and income on F.D. will be exempt in her hands. But the provisions of IT Act are clear regarding clubbing of income. That means income which is exempt in her hands made out of your assets will be clubbed in your income. You are left with no option but to pay the tax.

Thank You Ma`am (CA Neha Gupta) for ur Support to my answer...