Gift to spouse

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This discussion explores the tax implications of a husband gifting 50 lakhs to his wife, who is retired with savings. It clarifies that income generated by the wife from the gifted amount may be clubbed with the husband's income for tax purposes. However, several exceptions are noted, including income earned from income arising from transferred assets, cash gifts invested by the spouse, capital gains on gifted property, and the requirement for the transaction to be genuine.

Chandu

Chandu (Querist)
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14 August 2020 I have a question for my study purpose.

What are the tax implications of gifting 50 lakhs to spouse? If the husband is retired with no pension, and only has a savings of 1 cr. If he gifts 50 lacs to his wife and they both open FD.

Bhavin Shah

Bhavin Shah (Expert)
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15 August 2020 Income generated by wife from the amount gifted would be clubbed with income of husband and taxed accordingly

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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19 December 2021 Exceptions under sec. 64(1)(iv) ...

1. Income earned out of Income arising from transferred assets not liable for clubbed. [M.S.S. Rajan 252 ITR 126 (Mad)]
2. Cash gifted to spouse and he/she invests to earn interest. [Mohini Thaper vs. CIT 83 ITR 208 (SC)]
3. Capital gain on sale of property which was received without consideration from spouse [Sevential M. Sheth vs. CIT 68 ITR 503 (SC)]
4. Transaction must be real. [O.N. Mohindroo 99 ITR 583 (Delhi)]

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