If a person has made FD on his wife name and his wife has never filed a return and doesnt have a PAN. So in this case what would be the treatment of FD interest income?
If a person has made FD on his wife name and his wife has never filed a return and doesnt have a PAN. So in this case what would be the treatment of FD interest income?
Rahul Gupta
(Project Controller ACA MBA(Fin.))
(8014 Points)
Replied 24 May 2010
In Case, the taxable income of your wife is below taxable limt, then in case there is no need to file return and so nothing with the interest income. Just take it and enjoy.......no need to pay taxes or doing anything from Income Taxes point of view.
Regards
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 24 May 2010
According to me the amount of interest received on the FD will be clubbed in the income of the husband as per clubbing provisions [Section 64] because the amount of FD is given by the husband and not by the wife herself.
daya shankar singh
(CA ,CS)
(629 Points)
Replied 24 May 2010
Yaa sudhansu is right,
UNder Income tax Act there is specific section 64(1)(iv) under which an individual is assessable in respect of income from assests transferred to spouse
In ur case, u transferred cash into the FD of ur wife and on which interest will be received . In this case u will be taxable for the interest income of FD
bharat
(ARTICLE)
(86 Points)
Replied 24 May 2010
if FD made by a person on his wife name, It can be treated as gift because on maturity date amount of FD will only be received by his wife and interest will also received by her, So As per me, Interest Income will not be clubbed.
Nitin Grover
(CS)
(1228 Points)
Replied 24 May 2010
Dear Mahendra
As per rules of IT Act/CBDT every person having GROSS INCOME above the limit of exemption limit have compulsoty to file the return
if its below exemption limit than no need to file return
For Eg in current year if my Gross Income (before deducting benefits u/s 80c - 80u) is below 160000 or upto 160000 than i dont have need to file return
but suppose my income is 180000 and 80 C deduction is 30,000 than Net Taxable income is 150000 in this case i have to file my return because gross is above exemption limit.
Regards
CA.Sanjay Chopra
(Job)
(42 Points)
Replied 24 May 2010
Dear Mahendra,
As per clubbing provisions, only Income is to be clubbed, income on income is not be clubbed (interest on fixed deposits in your case).
Secondly, if it is not a case of transfer, a person can file Form 15G for non deduction of TDS if the interest on fixed deposits is the only income to the assessee.
Lastly, a person will be liable to get TDS deducted @ 20% if he/she is not quoting PAN.
Therefore, It is advisable to have PAN to avoid such over deductions.
Trust this clarifies.
Pl. do revert if further clarification is required in this regard.
Best Regards,
CA.Sanjay Chopra
91-9818155004
Nitin Grover
(CS)
(1228 Points)
Replied 24 May 2010
CA Gaurav Jain
(Charterted Accountant)
(156 Points)
Replied 24 May 2010
i m completely agree with Nitin Grover
kantijain
(Chartered Accountant in Practice)
(385 Points)
Replied 24 May 2010
Dear mahendra,
i totally agree with shudhanshu agarwal. clubbiung provision will get attracted.
Regards
Kanti Jain
Reena Verma
(CA Finalist)
(417 Points)
Replied 24 May 2010
I do agree with Sudhanshu Aggrawal and Daya Shankar Singh as the amount of interest on FD will be clubbed according to section 64(1)(||).
Thanks Members for your Valuable advice.
I also agree that income on money transferred is to be clubbed in the hands of transferor if any amount of money is transferred without any consideration but can form 15 G be filed in that case for no deduction of tax ?
or what if it is not shown by the husband in his return of income since he is a salaried employee?
please advice.
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 25 May 2010
As FD is on the wife's name so PAN quoted should be of his wife. As you have mentioned that his wife doesnt have PAN then according to new provisions of section 206AA TDS will be deducted @ 20%. So it is better to ask his wife to apply for PAN and then fill Form 15G as declaration that she is not liable to pay any tax to the Government.
Vivek
(others)
(47 Points)
Replied 25 May 2010
hello
i have just enetered in to the ca course iam too confused ragarding coaching classes iam from jalandhar-punjab if any body knows the best coaching available for cpt plz suggest me
thnxx in adavnce plzz doo help me iam very depressed
DT Fundas - Tarun rustagi
( Author)
(1150 Points)
Replied 25 May 2010
clubbing provision is attracted hence u will be liable to pay tax on this interest income. and dear all who are not agreed with this point then plz tell why it is not clubbed.according to ur view it can become a better tax planning.but income tax dept. is not fool as u think
GST Live Certification Course (39th Batch) - April 2024 (Weekend Batch) (With Certificate)
"Live class on Python for Financial Analysis: Unlocking Efficiency in Accounting and Finance"