Scrutiny
Querist : Anonymous
1. it is not an expense
2. it is not giving you any long term benefit.
Querist : Anonymous
WHETHER THIS AMOUNT BE CAPITALISED IN HUSBAND
CAPITAL ACCOUNT ?
Querist : Anonymous
Querist : Anonymous
Querist : Anonymous
**Can a wife gift money to her husband without tax consequences?**
* Under **Income Tax Act, Section 56(2)(x)**, gifts received from certain relatives, including a **spouse**, are **fully exempt from tax** in the hands of the recipient. So **gifts from wife to husband are NOT taxable**.
* However, if the wife **gave money as a "loan"** and it is not repaid or documented properly, the Income Tax Officer (ITO) might **disallow it or treat it as income**, especially if they suspect tax evasion or lack of genuine transaction.
---
### What might be happening in your case?
* If the wife gave Rs. 2 lakh as a genuine **gift**, it should NOT be added back as income.
* If the wife **gave it as a loan**, and the husband did not repay or there is no evidence of repayment terms, the ITO might consider it as income or unexplained cash.
* Also, lack of documentation or clarity can lead to additions in scrutiny assessment.
---
### Can this amount be capitalized?
* **No**, additions made by ITO in scrutiny assessment generally cannot be capitalized because:
1. It's not a genuine capital expenditure.
2. It doesn’t create any asset or long-term benefit.
---
### What to do?
* Provide proof that the Rs. 2 lakh was a gift (gift deed, bank transfers, etc.).
* If treated as a loan, show documentation for repayment terms and actual repayments.
* If it is genuinely a gift from wife, raise objections to the addition citing the exemption under Section 56(2)(x).
---
**Summary:**
* Wife can gift money to husband tax-free.
* If treated as a loan, it must be repaid; otherwise, the tax officer can add it as income.
* Such addition is not capitalized in accounts.
---
If you want, I can help draft an explanation or objection letter for the scrutiny assessment! Would you like that?
Click here to login now
Similar Resolved Queries
- STCG....................................................
- Supply through E-commerce Operators
- Sales return eway bill
- AMOUNT RECEIVED UNDER COMPULOSRY ACQUISITION OF AGRICULTURAL LAND
- TAN for Partnership
- Relief u/s Section 89
- GST Registration Horse racing
- Section 43B(h) – MSME Invoice Paid Before Year End but After 45 Days
- Taxation on LTCG for property sold after 24JUL2024
- Is E Way Bill Valid If Transport ID Not Mentioned in PART A But Vehicle details mentioned in PART B
- Section 54F - Exemption on LTCG in 2026 for HP purchased in 2023
- Sales amount in Gstr1
- CG after sale of flat
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
