Wife's Income Taxed With Husband Income
Many taxpayers think that if they transfer money to their wife's bank account for investing in assets, they may reduce tax liability. However, under Section 64 of the Income-tax Act, 1961, this strategy may not work as expected.
If your wife's income generated from investments made using husband's money, then Income Tax Department may club that income and can taxed at the husband's hands under Section 64.
Income Are Covered Under Clubbing
Income is generally clubbed when husband gifts money to wife and with that she earns:
| Income Type | Clubbing Applicable |
| Fixed Deposit Interest | Yes |
| Savings Account Interest | Yes |
| Mutual Fund Capital Gains | Yes |
| Share Market Capital Gains | Yes |
| Rental Income | Yes |
| Gold Investment Gains | Yes |
For Example
Example 1
Vijay gifts his wife ₹10 lakh. She opens a Fixed Deposit account where she earned say ₹60,000 as annual interest.
Since the investment was made using Vijay's money, the ₹60,000 interest is taxable in Vijay's ITR, not his wife's.
Re-investment Conditions
When wife re-invest in FD again
| Particulars | Tax Treatment |
| First FD Interest (₹60,000) | Clubbed in Husband's Name |
| Wife reinvests interest in FD again | Allowed |
| Interest on reinvested amount | Taxable in Wife's Hands |
| Clubbing on Second Hand | Not taxable in husband's hand |
Note: Clubbing applies only to first income, not income on income.
Example 2
Aditya gift his wife ₹10 lakh where she investment the same in mutual fund. She sold it for ₹13.5 lakh, capital gain is ₹3.5 lakh.
Here,
| Source of investment money | From Husband |
| In whose name investment made | Wife |
| Capital Gain Taxable | Husband |
Now, if wife gifts the money to husband then,
| Source of investment money | From Wife |
| In whose name investment made | Husband |
| Capital Gain Taxable | Wife |
Click To Know: Due Date For Individuals To File ITR For AY 2026-27
How to Report in Husband's ITR?
- If you are filing ITR form ITR-2 or ITR-3, select the "Schedule SPI" for income of a specified person (spouse, minor child etc.) and enter the name of spouse, PAN, Aadhar, relationship, amount and the head of income.
- Then, go to TDS section for transferring of TDS or claiming TDS in his return- As TDS is deducted in the wife’s name, the husband can claim the credit.
- You just need to select "Modified Flow" to claim credit for TDS from other person.
- Then enter TAN of the deductor (say bank's TAN).
- Select section under which TDS deducted - say 194A (Fixed Deposit).
- Enter the amount of income, TDS, Claimed in own hand.
AIS may show payments or credits attributed to the wife, taxpayers should feed back by selecting type "information refers to other person" to rectify AIS entries indicating that amounts pertain to spouse-related transactions so records match the claimed clubbing or transfer entries in returns.
Know About ITR Processing Time 2026
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