Regarding loan to wife

Dear Siva,

If you want to give loan to your wife then you can definitely give but make sure if loan amount is rs 20000 or more it should be given through account payee cheque or DD. You can give interest free loan also. There is no need to charge interest from your wife on interest free loan.

Second thing, from your query it seems that you want to save income tax, therefore your concern is to divert money and give loan to your wife. Well Siva you can gift money to your wife also. There is no income tax on gift. From that amount your wife can invest anywhere and income from investment will be taxable in the hands of your wife. So it is the best option to save income tax instead giving loan bcoz in loan you have to do some paper formalities.

I hope this will help you.

Thanx

CA Anubhav Vishnoi

8750089567

Dear Mr Anubhav ......Don't you think that gifting money to wife will attract clubbing provision u/s 64(1)(iv)??

From my point of view...... tax will not be payble on the gifted amount........But the income so earned by wife from such gift will be clubbed in the hands of husband and no tax treatment in the hands of wife.