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Tds and clubbing of income

Naveen Kumar Jain (Chartered Accountant) (640 Points)

20 July 2017

A has gifted some amount to his wife. The amount is put in term deposits and wife has earned interest. There is no other income earned or accruing to wife.The bank has deducted tax and deposited under wife's PAN. The interest income has to be clubbed with husband's income. How the TDS which is appearing in wife;s PAN and in her AS26 form will be accounted in husband's ITR and how will he get the credit for same. Kindly advise the process for the same.

Read more at: /experts/clubbing-income-and-credit-for-tds-2524049.asp

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 20 July 2017

Wife will have to file return and get the refund of TDS.......

Husband should add the interest income(inclusive of TDS) in his declaration without actual credit of TDS.

Poltu Ghosh (Job) (1865 Points)
Replied 20 July 2017

You committed a mistake. You should have filed a declaration to the bank (deductor) under Rulr 37BA that the interest income will be clubbed with your income and thus TDS be credited in your PAN. Now you may approach bank with the declaration and request the bank to file a correction statement replacing your Wife's PAN with your PAN. Once the bank do it you will get the credit.

1 Like

Poltu Ghosh (Job) (1865 Points)
Replied 20 July 2017

Rule 37BA of Income Tax Rules 1962: TDS Credit-Section 199 Rule 37BA : Credit for tax deducted at source for the purposes of section 199 (Chapter: VI - Deduction of Tax at Source) (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorised by such authority. (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 referred to in sub-rule (1). (ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person.