fardin khan (fdg) 19 January 2015
My income level falls into 30% income tax bracket while my wife is not working. I want to loan some amount to my wife for investing in stock market - she will do the research and do trading herself. Will the short term capital gains from her investments be clubbed with my income or will that be treated as independent income. My queries are: 1) Can my wife treat the interest paid to me on the loan amount as expense and deduct that amount from her Short Term Capital Gains while computing her tax 2) To avoid the clubbing of inome rule (income tax law section 64), do I have to charge a minimum interest to my wife? If yes, what is the interest rate. 3) Is there any limit on the loan term? 4) What are the document that needs to be prepared to make the loan contract valid? Does it have to be written on stamp paper/notarized etc?
Sai Prasadh (Investment advisor) 20 January 2015
(1) In respect of short term capital gain for yr wife, she can clain interest paid to u & brokerage to stock broker can be deducted from STCG.
(2)To avoid clubbing of income u need to charge minimum lending rate fixed by SBI
(3) no ceiling limit for loan amount
(4) Buy ten rupee stamp paper and print the loan agreement.