Gift and loan to wife
24 June 2019
I have heard from an Income Tax expert on all India TV show that you cannot gift to your wife.
My question is suppose I have Fifty Lakhs in Bank. I have other taxable incomes and to save tax if I transfer this amount to my wife, who has PAN card, and my wife makes F.D. from that amount and pay tax on interest she will earn from it or utilises exemption limit of Rs. Five Lakhs income available to her and I show this transfer as loan . Is this transaction permissible under I T. Act ?
28 June 2019
The transaction is permissible. It can be an interest free loan to your wife, or even gift. There is no tax liability. Further the wife shall be eligible to avail benefit of exemption limit.