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Bank interest in jt account of husband and wife

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sunil kumar dr.

specialist

21 Points Posted on 18 April 2012

sir,

I AM GOVT SERVANT AND MY WIFE IS HOUSE WIFE ,MY WIFE HAS INCOME BY WAY OF GIFTS FROM RELATIVES .PARENTSAND SHE PUTS ALL THAT IN MY ACCOUNT

NOW INTEREST ACCRUES IN JOINT ACCOUNT WHICH IS DIVISIBLE IN TWO EQUAL HALVES ,BOTH BEING JT ACCT HOLDERS .

BANK DEDUCTS TAX AT SOURCE ON WHOLE INTEREST AS PER RULE. SINCE I AM ENTITLED TO 50% OF ACCRUED INTEREST, I ADD 50% TO MY GROSS INCOME AND CALCULATE INCOME TAX AND PAY.

IS IT CORRECT.SHOULD I PAY TAX ON FULL INTEREST ON JT ACCOUNT AS SOME SO CALLED EXPERT SAY PL CLARIFY IF U COULD

THANKS

SUNIL

Replies (3)

Prateek Agarwal

Sr. Executive - Finance & Accounts

1846 Points Posted on 18 April 2012

Dear Sir,

You cannot break the interest income in two halves. The whole of the interest income will be chargeable in your hands

PRIYANKA GUPTA

ASSISTANT

144 Points Posted on 19 April 2012

YOU ARE LIABLE TO PAY INCOME TAX ON WHOLE INTEREST.

CA PARAS BAFNA

Practising CA

25530 Points Posted on 20 April 2012

Inspite of making two halves of the interest amount it will be better to open another account of your "Better Half".

The days are not away, when the gifts received by the wife of a Govt. Employees may be clubbed with the income of employee or may be treated as unexplained money in the hands of the account holder.

Departmental action may follow after passing the "Lokpal" only.