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Related to clubbing provision of the income tax

13 January 2012

Mr X (husband) gives the gift of Rs. 500000 by cheque to Mrs.X(w/o of Mr X).Mrs X make the Fixed Deposit of the same and earning the interest on the same.

Whether interest earned by Mrs X will be clubbed in the income of Mr.X ?Why?

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2 Replies

Bhushan Ramani (Chartered Accountant) (105 Points)
Replied 13 January 2012

Hey,

I dn't think so, clubbing provision vil not attract on the interest income. Actually , the clubbing provision are only attracted to the capital asset which are provided without adequate consideration and not on accurals of the same.. Hence, the interest income which is received by Mrs. X will not attract clubbing prov. and same shall be taxable in her hands.

Regards ,

Bhushan