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.
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### 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.
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### 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.
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### 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).
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**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.
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If you want, I can help draft an explanation or objection letter for the scrutiny assessment! Would you like that?
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