Nri clubbing
This query is : Resolved
Durgesh Laddha
(Querist)
11 April 2012
Dear Friends
I have a query regarding NRI clubbing.
Husband and wife both are NRI. Husband transfer some fund to his wife (Thru NRE, NRO a\c) and then wife make a Fixed deposit in Bank. Bank give interest and TDS was done on wife PAN No.
So, Interest Income of wife clubbed with husband income or not ?? (keep in mind, both are NRI)
if yes then how we can take credit of TDS in hands of Husband.
Durgesh Laddha
I have a query regarding NRI clubbing.
Husband and wife both are NRI. Husband transfer some fund to his wife (Thru NRE, NRO a\c) and then wife make a Fixed deposit in Bank. Bank give interest and TDS was done on wife PAN No.
So, Interest Income of wife clubbed with husband income or not ?? (keep in mind, both are NRI)
if yes then how we can take credit of TDS in hands of Husband.
Durgesh Laddha
11 April 2012
According to me, the clubbing provision would be attracted. As per Section 64 of the Indian Income Tax Act, any income arising from assets gifted to spouse is to be taxed in the donor spouse's hands.NRE accounts are in Indian banks and hence subject to Indian jurisdiction.
The tax law in India specifically exempts interest from NRE accounts from tax. But this doesn't mean that other tax provisions are not applicable to the same.
The only way this clubbing provision can be circumvented is by transferring funds to the spouse abroad. Then the wife can send money to her NRE account here in India. In such cases, though the credit to the NRE account has been received from funds sourced from the husband, since such transfer had taken place abroad, Indian law will not be applicable.
According to me, the clubbing provision would be attracted. As per Section 64 of the Indian Income Tax Act, any income arising from assets gifted to spouse is to be taxed in the donor spouse's hands.NRE accounts are in Indian banks and hence subject to Indian jurisdiction.
The tax law in India specifically exempts interest from NRE accounts from tax. But this doesn't mean that other tax provisions are not applicable to the same.
The only way this clubbing provision can be circumvented is by transferring funds to the spouse abroad. Then the wife can send money to her NRE account here in India. In such cases, though the credit to the NRE account has been received from funds sourced from the husband, since such transfer had taken place abroad, Indian law will not be applicable.
Mihir Doshi
(Expert)
11 April 2012
In my opinion, this is not a good tax planning advice.
How wife can prove about source of income when IT proceedings initiated??
Here, Wife should file NIL return of income and claim the refund while Husband will show this income under clubbing provision.
Expecting others opinion as well.
How wife can prove about source of income when IT proceedings initiated??
Here, Wife should file NIL return of income and claim the refund while Husband will show this income under clubbing provision.
Expecting others opinion as well.
Durgesh Laddha
(Querist)
17 April 2012
Dear Sir
Can I do that husband gave loan to his wife and then she is invest in MF's and Bank FD's. So I can take TDS credit in hand of wife and husband fund shown as a loan.
Can I do like this ???
Can husband give loan to his wife for investment without interest???
Can I this is according to lwas ???
Can I do that husband gave loan to his wife and then she is invest in MF's and Bank FD's. So I can take TDS credit in hand of wife and husband fund shown as a loan.
Can I do like this ???
Can husband give loan to his wife for investment without interest???
Can I this is according to lwas ???
Durgesh Laddha
(Querist)
20 April 2012
Ok thanks
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