Fd on wife's name

Interest inocome will be taxable in your hand.

I have similar query but in my case,  my ITR is submitted and it got processed with refund.  I received my refund.  

In my ITR i did not included FD income which is in spous's name.  

I have not filed my spouse's ITR yet.   What should I do?  I got advice to submit resived return from this forum.  My stand is that I will file revised return only if IT sends me notice.  

Regards

Ramesh

If the FD is in your wife\s name then why you should include the interest income in your return ??

Shouldn't it be included in your wife's return ?

Because it is not her income. (Note : My spuse is not working currently.and do not her own income.  But she use to work 6 years back and had some income)

Experts from this forum are advising me to file revised return to include FD income in my ITR.

I am OK with revised ITR.  Should I wait for Notice OR send revised return without?

I am also wondering whom do IT is going to send the notice? to me or to my spouse?

Hello JaiHari

Would like to clarify to you that FUNDS should be of your wife, (be it from past income or current) as long as it can be proved by you [eg Cheque clearance from her account] there shall be no clubbing.

Otherwise there has to be clubbing

DO  NOT HAVE EVEN 1% EXPECTATION that you will able to file revised return after the notice has been sent to you, I explained this very well while citing the provisions

"If you do not declare your income and AO interdicts it then he may , in addition to doing assessment of the escaped income u/s 147 , initiate penatly u/s 271(1)(C) for furnishing inaccurate particulars of income or for concealment of income.  On a side note penatly u/s 271(1)(c) can be upto 3 times the tax, tax shall also be recovered with interest"

Read more at: /forum/details.asp?mod_id=331190&offset=1

Primary target is the assessee in whose total income such income is to be clubbed , if its not possible to tax him or recover tax from him then it can be recovered from that assessee in whose name the asset was. Refer to provisions of S.65 for more details

S.65

 Where, by reason of the provisions contained in this Chapter or in clause (i) of section 27, the income from any asset or from membership in a firm of a person other than the assessee is included in the total income of the assessee, the person in whose name such asset stands or who is a member of the firm shall, notwithstanding anything to the contrary contained in any other law for the time being in force, be liable, on the service of a notice of demand by the Assessing Officer in this behalf, to pay that portion of the tax levied on the assessee which is attributable to the income so included, and the provisions of Chapter XVII-D shall, so far as may be, apply accordingly :

Provided that where any such asset is held jointly by more than one person, they shall be jointly and severally liable to pay the tax which is attributable to the income from the assets so included.

Originally posted by : Z
	Hello JaiHari Would like to clarify to you that FUNDS should be of your wife, (be it from past income or current) as long as it can be proved by you [eg Cheque clearance from her account] there shall be no clubbing. Otherwise there has to be clubbing DO  NOT HAVE EVEN 1% EXPECTATION that you will able to file revised return after the notice has been sent to you, I explained this very well while citing the provisions "If you do not declare your income and AO interdicts it then he may , in addition to doing assessment of the escaped income u/s 147 , initiate penatly u/s 271(1)(C) for furnishing inaccurate particulars of income or for concealment of income.  On a side note penatly u/s 271(1)(c) can be upto 3 times the tax, tax shall also be recovered with interest" Read more at: /forum/details.asp?mod_id=331190&offset=1     Primary target is the assessee in whose total income such income is to be clubbed , if its not possible to tax him or recover tax from him then it can be recovered from that assessee in whose name the asset was. Refer to provisions of S.65 for more details   S.65  Where, by reason of the provisions contained in this Chapter or in clause (i) of section 27, the income from any asset or from membership in a firm of a person other than the assessee is included in the total income of the assessee, the person in whose name such asset stands or who is a member of the firm shall, notwithstanding anything to the contrary contained in any other law for the time being in force, be liable, on the service of a notice of demand by the Assessing Officer in this behalf, to pay that portion of the tax levied on the assessee which is attributable to the income so included, and the provisions of Chapter XVII-D shall, so far as may be, apply accordingly : Provided that where any such asset is held jointly by more than one person, they shall be jointly and severally liable to pay the tax which is attributable to the income from the assets so included.

When do AO normally sends notice?  

Is it while processing my ITR for AY 2016 or while processing spouse's ITR for AY 2016?

OR 

While processing my (or spou's) ITR for AY 2017?

OR

While processing all future ITRs submitted by me (and spouse)?

As of now my ITR is processed, I received the refund in my SBI bank account.

Note - I am not waiting for a notice from AO though

Hello,

Show this transaction as loan then clubbing provision will not apply. 

Originally posted by : Vishal Goel
	Hello, Show this transaction as loan then clubbing provision will not apply.

What is the exact procedure to show money transfer from my a/c to spouse a/c as loan?

I did MT 1.5 years ago using RTGS

Can I do this procedure before filing spouse ITR now to escape from clubbing provision?

Details derived by me from above:

1.Wife worked 6 yrs back

2. FD created from funds in a joint account.

Question: Can you prove that wife's income(6 yrs back) was directly/indirectly deposited in this joint account? 

If yes, that no clubbing provisions. Else, revise the return before any notice arrives. 

Wait a min,

You said you are PLANNING to do an FD??? Then then interest income will be for AY 2016-17. no question of revising. simply club the income, if required and file the return next yr.

Originally posted by : Rashi Bajaj
	Details derived by me from above: 1.Wife worked 6 yrs back 2. FD created from funds in a joint account. Question: Can you prove that wife's income(6 yrs back) was directly/indirectly deposited in this joint account?  If yes, that no clubbing provisions. Else, revise the return before any notice arrives.

It is difficult to proove that wife's income is used for FD.    Please note FD created is in spouse's own account (it is not a joint a/c).  I did MT from my a/c to her a/c and then FD created in her name there

My question is will AO intradict me? Because my ITR is already submitted and refund is recevied in my a/c?

Hi Rashi, 

It is pertinent to note the following facts

1. There was funds transfer , an evidence that wife did not had sufficient money for investing the funds in her own name. Although this is a prima facie evidence but if questioned , I wonder how will OP satisy AO.

2. That his income is liable to higher tax bracket [30%], whereas his wife income is at lower tax bracket [no other income]  . Had this not been the case , the things would go bit different. 

3. This FD had been transacted already so loan agreement can not be entered into now.

@ JaiHari , even AO need to do an enquiry for this. As i have already explain you the limit of 4 years/6 years/16 years.

What I have seen is that usually notices are send when this time limit is about to end.

And am not talking about scrutiny u/s 143(2) [as already explained in previous thread] , since for that time limit is 1 year from the end of year in which return was filed