Income tax: combining wife's income with mine.

Hello members,

(I have limited knowledge in tax related topics, so kindly bear with me)

These are my queries;

1) I have deposited some amount as an FD in my wife's name. I understand that the interest received on that FD has to be combined with my income while filing returns. Am I right here?

2) So if I file a return after combining the above said interest with my income, does my wife have to file a return also? I am confused here as the interest amount is above exemption limit. So if she also has to file return then wont we be paying tax twice on same interest amount!!

Thanks

Sandeep