In a particular Husband and wife, both salaried individuals for the past 12 years accumulate savings in the form of FDs in joint accounts and now the wife has stopped working due to health issues.
Husband continues to work and is taxed at the highest rate of the slabs. Going forward, Can the husband transfer all savings to wife single account so that the tax liability could be kept at lower slabs ?
A husband can transfer all his savings too to his wife but the interest thereon will be includible in the income of husband as the rules of clubbing of income apllies.only the interest on savings of his wife from her personal income will not be includible
How do we ascertain personal income/ source of funds here ? If it can be demonstrated that the source of the money in the joint account / FD was wife's post tax salary over the past many years, then also the interest will be included in husband's income ?
Noif it can be shown that the amount desposited in joint account have been because of the savings of wife's post tax salary and the amount is transferred to wife's account then the interest thereon will not be includible in husband's salary.
T R SOOD & CO
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Rahul Dang & Associates-Chartered Accountants
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