Tax on interest income of wife

Hi, i want to know that if I transfer some money to a joint account where my wife is the first account holder (her PAN number is registered) and i am the second account holder, and she subequently invests it in FDs, will the interest income be added to her income or mine? both of us file our tax returns regularly. my wife is not a housewife and has other sources of income also, but she falls in a lower tax bracket that me.

In case, the interest income needs to added to my income, how can one handle that fact that the bank has deducted TDS and it shows against the form 26as of my wife. how would i be able to get the TDS credit if i have to add the interest income to my income. thanks for the help

Going strictly by the clubbing provisions of the IT Act, the interest from the funds transferred to your wife would be clubbed and taxable in your hands. If that be the case why bother to invest in wife's name and attract TDS in her name and the resultant complications.

In case you do need to do that, it would be extremely complicated to get credit of TDS in your nme when bank has deducted in wife's name (especially in the e-return regime, since credits are automatically taken) There is a provision in the ITR's to include the PAN of the person whose income is clubbed with yours. But whether this be will enough to claim and activate the credit under that PAN needs to be seen. Any readers who have had this experience may share them.

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Mayank

Rajagopalakrishnan R

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