Gift of money to my wife.

• Interest earned by your wife on SCSS investment from that gift wil be taxable in your hands due to clubbing provisions.

Gifting Rs 30 lakh to a wife for SCSS:

• The gift is exempt for her (spouse is a relative), but interest she earns on SCSS from that money is clubbed with your income (Sec 64(1)(iv)). It doesn't save tax.

• She must be 60 or above (or eligible retirees) to open SCSS, and the deposit limit is Rs 30 lakh per individual.

• Alternative: if she has her own funds, those investments' income is hers.

Interest from SCSS is generally taxable under your wife’s PAN, because the income arises from an investment held in her name. However, since the SCSS deposit is being funded by a gift from you, the clubbing provisions in section 64(1)(iv) apply: the interest attributable to the gifted amount is included in your taxable income, not hers. The gift itself is not taxable between spouses.

Your wife may still need to file an ITR if her total income or other applicable filing conditions require it; a zero-income return is not automatically appropriate once SCSS interest is received. Keep the gift and investment trail clear, and check whether any part of the investment is funded from her own money, as the income treatment may then differ.

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