In case husband gifts some money to his wife, so that she can repay her outstanding housing loan out of that money received as a gift, my question here is that since there will be no income generated out of that money, as full gift amount will be utilised for housing loan repayment, please let me know that will clubbing provisions u/s 64 apply. And will the husband have to show a notional income on that gift amount in his ITR. Please clarify.
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Gift to wife for repayment of housing loan
Replies (2)
In my opinion since money was not invested for generating income clubbing provisions will not apply since it is the income which is earned out of gifted money which is clubbed with the income of the donor.
Clubbing provision are made to prevent evasion of tax by transferring income to related persons.Since no income is generated in the above transaction, clubbing provision is not attracted
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