Scss in the name of wife -- tax implications.

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I am 63 years old retired person going to live on interest income now and have opened an SCSS account depositing the maximum amount of Rs 15 Lacs.

My wife is also 60 years now and she is going to open SCSS account in her name depositing maximum amount of Ra 15 Lacs from our Joint Bank account in which my PAN Card is attached. She has applied for a PAN card and will attach it to her SCSS account.

As per clubbing provision the interest on SCSS account of my wife may be treated as my income but I would like to avoid it and following questions are my questions:

Is transferring Rs 15 Lacs to wife as compensation for performing household duties for 39 years of married life an "adequate consideration"?

If it is "adequate consideration" are we liable to pay any tax immediately on Rs 15 Lacs transferred to her.

If it NOT an "adequate consideration" I know that the interest income is to be clubbed with my income but she could re-invest the interest earned and the subsequent interest would be treated as her income.

Kamalakar

Replies (3)
Quick Summary
The discussion focused on tax implications of investing in SCSS in a spouse's name. It covered clubbing provisions, transfer of funds, interest taxation, and whether giving money to a spouse as a loan or consideration can avoid clubbing of income.

Dear kamalakar,

simple way solve your problem is, by showing that you have given the money to your wife on loan and the interest that she gets from SCSS account will be taxed in her hand, not yours.

Even if TDS is deducted in your pan no. then claim it as your income from other sources and claim deduction immidetly saying that it belongs to you wife.

If your wifes total income crosse Rs 300000(Senior citizen) then she need to file her return.

If you have anyother quries pls let me know

Thank & Regards

 

Originally posted by : Ramanathan
Dear kamalakar,

simple way solve your problem is, by showing that you have given the money to your wife on loan and the interest that she gets from SCSS account will be taxed in her hand, not yours.

Even if TDS is deducted in your pan no. then claim it as your income from other sources and claim deduction immidetly saying that it belongs to you wife.

If your wifes total income crosse Rs 300000(Senior citizen) then she need to file her return.

If you have anyother quries pls let me know

Thank & Regards

 

You mean I can give interest free loan to my wife and the ITO won't put any notional interest on the Loan and also won't treat it as transfer u/s 60 (transfer of income without transfer of assets).

Kamalakar

you can say that you account the interest on cash bases, therefore you need not pay tax on it right now

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