Dear Members,
I have two questions on income arising from Gift to spouse:
1) Let us say a husband gifts 10 lakhs to his wife .....
1) .... on 30 of Mar 2011 and she deposits the same in bank FD. I understand that the income arising from this would be clubbed to the income of the husband (assuming he earns more) for 2011. The income in this case is for ONLY 1 day in the fiscal year of the gifting.
So does this mean that the income for the remaining period of the FD (which would spill over to FY 2012) need not be clubbed with that of the husband?
2) ....and she invests the same in MF, and does not withdraw anything in the same fiscal year (Y1) as it was gifted. Hence I presume there is no clubbing required as there was no income in the year of gifting (Y1).
In the subsequent year (Y2), after one year completed in the MF investment, she withdraws and I suppose there is no capital gains on this. She deposits the same in bank FD attracting tax at the end of Y2.
In this case does the husband have to pay any tax for y1? Does he have to pay in y2 OR is it tax onus on the wife?
Would be grateful if someone could clarify. Essentially the question is does clubbing of income apply ONLY to income generated in the year of gifting?
Thanks,
G
CAclubindia
