My wife is interested in stock trading. The money was donated by me. Explanation of income tax rules



However, I would advise you to start matching the income related to the money you offered her into your income and for the rest of the income that she has to produce her own ITR if the balance income still exceeds the exemption limit. basic. I understand the difficulty of separating income between that directly attributable to the donation you made and the balance of income that arose from the investment of income already bludgeoned. You can make this allocation by dividing the overall income in the respective ratio of the total of all donations made and the amount of the reduced balance of its total capital. Answer: In accordance with the provisions of Indian tax laws, any gift made by one spouse to another is fully tax exempt in the hands of the recipient and has no tax implications for both spouses. However, in accordance with the provisions of section 64 of the Income Tax Act, any income from the spouse from the assets offered from time to time must be matched with the income of the spouse who made the donation. The clubbing provision will apply as long as the marriage continues. If the asset is converted to another form, the clubbing provisions will continue to apply up to the value of the original gift. Please note that the clubbing provisions apply only to the initial amount of the gift and do not apply to income resulting from an additional investment made from such income. The money you give to your wife from time to time should be treated as a gift from you and the income against those original amounts of gifts given at various times should be clubbed into your income from the start. The clubbing provisions will apply even if she is an educated woman and has earned an income by applying her knowledge and skills. Since the time to revise the ITRs for fiscal year 2019-20 and the previous period is already over, there is nothing you can do now for past income.

Balwant Jain is a tax and investment expert and can be contacted on [email protected] and @jainbalwant on Twitter

In the event that all of the money invested represents savings on the pine money you donated to run the household, the clubbing provisions will not apply and, therefore, all of the income. can be shown as his income. What amount can be considered as a pin and not as a gift by the husband, various factors should be considered as the income of the husband, the amount given by the husband as a household allowance, reasonable monthly household expenses, etc. I would like to say a word to warn you. Do not try to use it as a tax avoidance tool and add to the club the portion of its income that can be related to your income on a logical and rational basis.

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