Tax liability on transferring money to wife's account

Dear sir, I plan to transfer money to my wife's account for her expenses and savings. is she liable to pay tax if it crosses 2.5 lah per annum? My wife is not working anywhere and is a home manager. We live together in India.

My plan is to transfer money my wife's account and open FD from her account. Income from FD will be below tax exempt limit. This way I can save tax on income from my FDs from my account. I come in to 30% tax bracket.

Thanks Arun

asked Nov 06 '14 at 01:05 by Arun 1578

If you give this amount as gift to your wife, there won't be any income tax payable on returns she earns from it and also on the base amount.

But if you transfer amount to her account just to earn tax free interest, this income would be added to your taxable income.

answered Nov 06 '14 at 12:05 by Pankaj Batra 5.2k320

Dear Sir, Please explain me the difference between those. How to make money transaction a gift. In both cases my wife will open FD and earn interest. Hope I did not confuse you. Actually I am confused. Please help Thanks Arun
(Nov 06 '14 at 20:12) Arun
Gift deed can be created on a plain paper Simple format of deed: KNOW ALL MEN BY THESE PRESENTS that I, ___ S/o Sh._ r/o _____, transfers voluntarily, CASH OF value of which is Rs._ (Rupees_ only) to my WIFE Mrs_ W/o of Sh.__ (hereinafter referred to as "the donee") To Hold the same to the donee absolutely forever. I further declare that the said gift has been made by me out of my natural love and affection for the donee and the same has been accepted by the donee. IN WITNESS WHEREOF, I have executed this deed this __ day of ____. Witness: 1. 2. DONOR DONEE I, Mrs __, the donee hereby accept the gift.
(Nov 07 '14 at 11:42) Pankaj Batra

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Asked: Nov 06 '14 at 01:05

Seen: 2,230 times

Last updated: Nov 07 '14 at 11:42