I am in 30% Tax bracket and my wife is a home maker. I understand that if I gift her Rs 10 lakhs and she invests them in 8% interest earning instrument, the interest of 80000 will be added to my income (Clubbing).
My question is;
1. How will the interest earned next year on the interest of Rs.80000, that is Rs 6400 be treated? Will it be added to my income or will it be treated as her income.
2. Further, if it is to be treated as HER income, can I buy NSC of Rs 10 lakhs, so that every year out of the accrued interest, 80000 will be added to my income and remaining will be treated as her income?
CAclubindia
