Itr for new practice

clubbing of income arises.

you cannot give loan to your own wife, but a gift and gift from relative is non-taxable your wife will not be taxed on the "loan" you given her.

and you will be having tax deduction on the interest you paid.

you took loan, you paying interest and want yo give your tax deduction to your wife.

wah what an husband.. seems like similar things i may have to do in future.

Clubbing provisions are not applicable in case of loan. A husband can give interest free loan to his wife. In the above case no deduction is allowed for interest paid on loan to husband. However interest is received by him then he can claim interest paid on loan as expense. He can show the amount paid as loan in his statement of affairs. in case of wife, she can use the amount received from her husband as she want in the business there is no restriction. The above treatment is applied in the case of amount received treated as loan. In case of gift clubbing provisions are applicable.

Hi Chander, thanks for a prompt reply(and a useful one). I have few queries, though. 

1. Does the loan have to be interest free? As I am a government employee and the clinic is registered un my wife's name, I want to steer clear of all this and wanted to pass the interest I am paying to my wife. This would make my gain/loss as zero but she could get to show the interest paid(and may be the original capital employed) as expense.

2. What paperwork is required for all this? Does a simple plain paper agreement work or does it have to be on a stamp paper and all? 

Thanks,

Navneet

Originally posted by : chander
	Clubbing provisions are not applicable in case of loan. A husband can give interest free loan to his wife. In the above case no deduction is allowed for interest paid on loan to husband. However interest is received by him then he can claim interest paid on loan as expense. He can show the amount paid as loan in his statement of affairs. in case of wife, she can use the amount received from her husband as she want in the business there is no restriction. The above treatment is applied in the case of amount received treated as loan. In case of gift clubbing provisions are applicable.

 

Please read the original query properly to understand it correctly. Also, please update your knowledge(darconian as it sounds) regarding such topics before answering and mocking the other person.

Originally posted by : Harsha
	clubbing of income arises. you cannot give loan to your own wife, but a gift and gift from relative is non-taxable your wife will not be taxed on the "loan" you given her. and you will be having tax deduction on the interest you paid. you took loan, you paying interest and want yo give your tax deduction to your wife. wah what an husband.. seems like similar things i may have to do in future.

 

Loan may be interest free its not necessary, you may received interest from ur wife. It would be included in ur total income as income from other sources and ur wife is allowed to claim such interest as expense. I suggest charge interest on loan at the same rate as bank charges. In such case ur net income will be zero. But plz consult it from ur CA and after confirmation proceed further. No need of any type of agreement for this situation make payment through cheque and show such payment in ur soa asset side in wife name and in case of ur wife balance sheet it should be shown in liabilities side in ur name .