I am the owner of a Private Limited Company.
My wife, who is B.E (Electrical), works part time in the company. She does computer graphic design work. She is quite good at design.
If I start giving salary to her, can that income to clubbed with my income?
Please let me know.
Correct me experts, if i am wrong
| Originally posted by : Manika Venkata Siva Prasad | ||
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If you are giving salary to your spouse for her technical and professional services, the income should not included/clubed to your account. REMUNERATION FROM A CONCERN IN WHICH SPOUSE HAS SUBSTANTIAL INTEREST [SEC 64 (1) (ii)] Concern – Concern could be any form of business or professional concern. It could be a sole proprietor, partnership, company, etc. Substantial interest - An individual is deemed to have substantial interest, if he /she (individually or along with his relatives) beneficially holds equity shares carrying not less than 20 per cent voting power in the case of a company or is entitled to not less than 20 percent of the profits in the case of a concern other than a company at any time during the previous year. If the following conditions are fulfilled this section becomes applicable. • If spouse of an individual gets any salary, commission, fees etc (remuneration) from a concern • The individual has a substantial interest in such a concern • The remuneration paid to the spouse is not due to technical or professional knowledge of the spouse. Then such salary, commission, fees, etc shall be considered as income of the individual and not of the spouse. |
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agreed
if the salary is according to her technical and professional knowledge and qualification, then there is no clubbing. it will be her salary.
i used according to because as she has interest so she can be paid much higher then others. so it is to be seen that remuneration is according to her qualification and experience. otherwise ITO can object
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