An assessee has given Rs. 11,00,000 to one party (non relative). And he is earning interest income on this amount. The annual interest comes to Rs. 1,32,000 (11,00,000*12%).
Now from F.Y. 2010-11, he is having salary income of Rs. 5,00,000 in addition to above interest.
My question is whether he can give the above amount of Rs. 11,00,000 to his wife as an unsecured loan so that interest income would be chargeble to his wife and he would be chargeble for only his salary income.
As per Sec 64(1) of IT act any income arising out of asset transfered to spouse other than by adequate consideration will be clubbed along with individual,s income. So even if he give the amount of Rs. 11,00,000 to his wife as an unsecured loan interest income would be clubbed in his income along with salary.
ya agree income would be clubbed in his income.
He can gift this money to his father. Accordingly interest income will be taxable in the hands of father of assessee.
CAclubindia
