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How to claim tds on clubbed income.

Omkar (Finance & Acct Dept) (75 Points)

27 July 2016

Dear All,

One of my client have kept deposit in the name of his wife. The Interest earned on this deposit needs to be clubbed in the Income of my client. TDS @ 10% is deducted by the bank in the name of client's wife. Request you to confirm how to claim the TDS Deducted in the name of Clients wife while clubbing Income of Interest in the Income of Client ??

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5 Replies

prb300190@gmail.com (self employed) (24 Points)
Replied 27 July 2016

Provided there is no other income taxable in her hand , A Nil return should be filed by her and accordingly claim TDS in the return.

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 27 July 2016

As per Rule 37BA, Clause 2(i), Where under any provisions of the Act, the whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for the whole or any part of the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee. Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 27 July 2016

Usually TDS (if deducted) on the interest income should be claimed by the individual, against whose PAN number TDS is deducted, in the income tax return and should be shown in TDS section. But in case of Fixed Deposit in name of wife, TDS is deducted against wife’s PAN number, husband cannot claim it.

In Husband’s ITR interest on FD should be shown under Interest in Income from Other sources as his income due to clubbing provision.

As TDS is deducted against PAN number of wife and wife has no income. To claim TDS file the ITR with income of wife from other sources as 0(zero) & get refund.

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Omkar (Finance & Acct Dept) (75 Points)
Replied 27 July 2016

Thanks all. I will try.

SURANA (PROPRIETOR) (515 Points)
Replied 08 October 2019

Is this provision same even today? and what if the FD is in the name of Minor Child and TDS is deducted on Childs PAN instead of Parents PAN.

Bank is not responding to the request for change of deductee PAN and can Minor Child ITR be filed with Zero Income and only TDS to be claimed? (Hoping it will not result into Defective notice as the Income is ZERO and TDS is claimed)
And now the ITR has some new options of mentioned PAN of deductee and carry forward... so can that be used ?