clubbing provision tds and refund

Dear Mr. Saiyum Khan

I have a similar situation. I have invested in FDs in name of my wife. Obviously my wife's interest income will be clubbed in my income. Now my query is that how can i claim TDS deducted for my wife in my tax return since her PAN number is different?

Another option i was thinking of is, though not sure if its a valid option: Since my wife has no other income and her interest income will be clubbed in my income, is it possible that my wife submits 15G to bank for non-deduction of TDS and at the same time i will pay Advance tax based on my income which will include interest on FDs invested in name of my wife.

Hope you can guide me on this. Many thanks for your help.

Regards,

Rajesh

If you deposit FD amount on your behalf than income deposit interest accrue on fd account which is on your wife name will be club with your income other wise not..

Bank deducted TDS can only claim you wife can claim at the time of filing return.

Yes if your wife income is below exemption limit than yes you can deposit form 15G.

Dear Mr. Saiyum Khan,

Can you please tell me if there are any case laws or judicial rulings regarding TDS credit allowed to the taxpayer in whose hands income is finally assessed. One case law I am aware of is CIT vs Malibu Estates (2007) (Del), I was wondering if you are aware of any similar decisions from Mumbai High Court or Supreme Court.

Many Thanks,

CA Darryl Martis

it can not be claimed, as the bank does have information that you have invested in name of wife, if u disclose such things to bank then bank will make deposit the amount in your name and keep wife as co-depositor, however u have option to take credit of interest in wife's account, and TDS would go in your account.

Bank has treated the amount as wife's own fund and done accordingly, so she has to claim refund in her own file.

regarding clubbing, its between yourself and wife, neither bank nor the income department asked you to tender the funds to wife, so if such transaction reflect from your records then its clubbed and your burden is increased by the amount of clubbing,

Dear CA Darryl Martis

I am not aware of the case laws, but if your query is related to current or future transactions i believe there is no need to refer to any case laws since the new rule Rule 37 BA (read with section 199) has come into effect. Below is the Rule which is self explanatory. Even i am in the same situation where i have invested in FDs in my wife's name and am going to submit declarations to banks under rule 37BA.

[Credit for tax deducted at source for the purposes of section 199.

37BA. (1) Credit for tax deducted at source and paid to the Central Government in accordance with the provisions of Chapter XVII, shall be given to the person to whom payment has been made or credit has been given (hereinafter referred to as deductee) on the basis of information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorised by such authority.

(2) (i) If the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for tax deducted at source shall be given to the other person in cases where

          (a)  the income of the deductee is included in the total income of another person under the provisions of section 60, section 61, section 64, section 93 or section 94;

          (b)  the income of a deductee being an association of persons or a trust is assessable in the hands of members of the association of persons, or in the hands of trustees, as the case may be;

          (c)  the income from an asset held in the name of a deductee, being a partner of a firm or a karta of a Hindu undivided family, is assessable as the income of the firm, or Hindu undivided family, as the case may be;

          (d)  the income from a property, deposit, security, unit or share held in the name of a deductee is owned jointly by the deductee and other persons and the income is assessable in their hands in the same proportion as their ownership of the asset :

Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1).

(ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person.

(iii) The deductor shall issue the certificate for deduction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody.

(3) (i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable.

(ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.

(4) Credit for tax deducted at source and paid to the account of the Central Government shall be granted on the basis of

           (i)  the information relating to deduction of tax furnished by the deductor to the income-tax authority or the person authorised by such authority; and

          (ii)  the information in the return of income in respect of the claim for the credit,

subject to verification in accordance with the risk management strategy formulated by the Board from time to time.]

Sir.

I deposited my money in my wife's name in a bank. They took PAN Number of my wife and making TDS.  I am an income tax accessee and she is not. She is a house wife. Is there any provision to make TDS using my PAN Number. Then after  TDS from the interest paid by the bank, the funds can again be deposited in my wife name separately and this time I need not pay tax on this. She can show in her income using her PAN Number. 

When I asked in the Bank to do like this, they told not possible to do TDS in my PAN Number as the deposit is in my wife name.

Please guide me what to do.

SRINIVASA from Vijayawada.