URGENT!! How to loan money to wife

however if u want to deposit money in any FD scheme in the name of ur wife,it will be clubbed in the hands of you as per clubbing provision.if u want deposit the money u can invest in UTI Funds as any income received from UTI is exempted,it wont make any difference if u going to invest in ur name or ur wife's name.

but my sugestion u can invest in ur wifes name.

Originally posted by : kishore choudhury
	however if u want to deposit money in any FD scheme in the name of ur wife,it will be clubbed in the hands of you as per clubbing provision.if u want deposit the money u can invest in UTI Funds as any income received from UTI is exempted,it wont make any difference if u going to invest in ur name or ur wife's name. but my sugestion u can invest in ur wifes name.

 Sir, as I mentioned earlier, I am savingmoney for home loan down payment so I may need money back anytime in say...say within next 1 year so you suggest UTI investment will be better option ??

for loan/gift to wife, just issue a cheque in her favor and show in your returns, capital outgo to wife, 

clubbing provisions will apply on the income/gains from these funds,

if u plan for properties, then its good idea, otherwise invest in tax free instruments viz Mutual funds etc where the income is tax free.  

Originally posted by : U S Sharma
	for loan/gift to wife, just issue a cheque in her favor and show in your returns, capital outgo to wife,  clubbing provisions will apply on the income/gains from these funds, if u plan for properties, then its good idea, otherwise invest in tax free instruments viz Mutual funds etc where the income is tax free.

Sir,

 I am planning for house purcvhase only...so that I want to show interest earned on FDs as her income to increase the loan amount.

but, can you please explain me on your line "clubbing provisions will apply on the income/gains from these funds"....does that mean whatever interest earned on loaned amount is her income and not mine....so that mean I have loaned for 0% interest rate.....is my understanding correct.

Anand

Interest earned on FD will be her only, but she can not avail Tax benefits, coz the interest earned will be get added to your hands !! it will not benefit her way of incometax!!

if u want to save tax then route the same from some relative / close friend, and make book entires of the same. 

say .........you X

wife Y

friend/ relative Z

funds flow ......................X>Z>Y

now the income of wife can not be clubbed to yours :)

Originally posted by : U S Sharma
	Interest earned on FD will be her only, but she can not avail Tax benefits, coz the interest earned will be get added to your hands !! it will not benefit her way of incometax!!   if u want to save tax then route the same from some relative / close friend, and make book entires of the same.    say .........you X wife Y friend/ relative Z funds flow ......................X>Z>Y   now the income of wife can not be clubbed to yours :)

agreeed ....... it is the right way.....

Originally posted by : U S Sharma
	Interest earned on FD will be her only, but she can not avail Tax benefits, coz the interest earned will be get added to your hands !! it will not benefit her way of incometax!!   if u want to save tax then route the same from some relative / close friend, and make book entires of the same.    say .........you X wife Y friend/ relative Z funds flow ......................X>Z>Y   now the income of wife can not be clubbed to yours :)

 Sir,

https://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/how-to-cut-tax-by-investing-in-spouses-name/articleshow/7167789.cms?curpg=1

In above article, paraghaph 5 and 6 says as below

For instance, one may think of gifting money to his mother-in-law, a transaction that has no gift tax implications. Then a few days later, the lady gifts the money to her daughter, which again does not have any tax implications. The money can then be invested without attracting clubbing provisions, right? Wrong.

Given that most big-ticket transactions are now reported to the tax department by third parties (banks, brokerages, mutual funds, insurance companies), it may not be difficult to put two and two together. If the taxman discovers this circuitous transaction, you may be hauled up for tax evasion. Are there ways to avoid the clubbing provisions without crossing the line between tax avoidance and tax evasion? Yes.

 

adding 2+2 will go for 4 :) yes its true,

but direct clubbing provisions vs roadmap of such transactions, both are different

as you have shown your interest to get property in short term, where the income is NIL for self occuplied property and u have to get only income between the loan period and property buy period, also ur need is to establish a IT file in wife's name with her income, which all are to get solved with this short trick.

i asked u for this roadmap for a short term remedy, otherwise clubbing provisions cant be avoided in direct transactions ..........

if we give any amount as a gift ......then what ???? clubbing provision will be applicable????

Regards

Madhusudan

Dear anand,

Ur wife is literate then u can show her income from tution fees / cooking fees 

and money received at the time of marriage as gift is exempt from tax

Say u deposited the same money in ur own account & apportion some amount to ur wife as marriage gift money

& some as monthly pocket money and multiply by no of yrs of marriage

now ur wife has enough money in his hand to make the FD and interest earned on this income cannot be clubbed in ur hands.

by this way u can file the itr of wife and clubbing provision cannot be attracted.

not the whole part but some part will be routed through this way.

thogh my need is short term money invest and tax save, I still have pay income tax on interest earned for the period starting from loaning day to property purchase, if I give draw a check in my wife name.

if I do x>y>z transaction then mostly "Y' will get clubbing income and related tax...so nobody will agree.

So, if I understood correctly ...the best way would be

1. I withdraw cash from my account and deposit the same in her account. (the question of how she got this much money is answered by Manoj..I am married from last 3 year and saving money...though difficult to prove for INR 8+ lack in 3 years). thogh Maximum cash withdraw is INR 50K we can manage.

2. She drwas checks from her on bank account for FD in her name (may be joint account with me)

3. THen interest earned will be her name

PLease correct if I am missing any.

Thank you Mr. Sharma.

Thanks others to for helping me to get answer for this.