Treatment of income(interest) received by wife who received gift of money from her husband

Technically gift to wife is not taxable but any income earned by wife on such gift will be clubbed in income of husband as per section 64.

There is no limit on gift amount.

Investment advice would be to not invest in medical premium as now you are a senior citizen even the medical expenditure you incurr would be allowed as deduction. You should either go for Equity linked saving scheme, or deposit in FD.

If you need detailed consultation I would request you have a call conversation as it will solve your query more quickly.

If your income is below taxable limit then you can submit form 15G/H and no TDS will be deducted on your income.

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Thank you

Hello,

Regarding gifting money to wife, Yes that gift will be taxfree as it is gift between relatives as per Income Tax Act, but the income earned by your wife by investing that money would be clubbed and taxable into your hands. So that I don't think would bring any tax saving to you.

Regarding tax saving, you can make certain investments and expenses which qualify for the deduction under Sec. 80C. As you will be receiving pension, you can invest in a Senior Citizens Saving Scheme (SCSS) and save taxes on pension income under Section 80C.

You can also invest pension income in a bank deposit and your interest income on such deposit would be tax deductible up to Rs 50000 a year under Section 80TTB. Other options could be availing a health insurance plan, you will be eligible for a tax deduction under Section 80D up to Rs 50000 a year on premiums paid for health insurance.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Hi,

1) As you have mentioned that your age is 60 and your wife age is 55 which demands fixed income per month and regular expenses on medical. First of all, keep some cash amounting to Rs. 2 to 5 lacs with you to meet the urgent medical expenses. The requirement of fixed income will be fulfilled by your pension income. Medical insurance at this stage will be expensive. If you can afford it, please go for it. Thirdly to augment/maximize the wealth, put 25-30% in FD's, 30% in wealth creation Mutual funds, 20% in equity shares etc. You need to create a portfolio which contains conventional and aggressive investments instruments. Don't put all eggs in one basket.

2) Gift of money to wife is not taxable but it is recommended to file ITR and show the amount of gift in the exemption column because if the amount credited in her account aggregation to Rs. 10 lacs or more will be reported by the bank to the ITD which then issues notice for compliance.

3) Income generated out of gift will be clubbed and taxable in your hands and the deduction would also be available to you.

4) There is no limit for gift.

Thanks

No you wont get any extra deduction.

I would advice you to provide such amount to your wife at a nominal rate of interest rather than showing it as gift. It would be more simple and beneficial.

Only deductions in relation to the clubbed income i.e. 10,000

No extra deductions would be allowed to you.

Dear Sir,

Hope you are doing well !!

- Interest income earned by your wife from investments made by her in her own bank account on the money gifted by you to her will be clubbed in your income.

-Instead of gifting which again clubbed into your head, you can give a loan to your wife with the nominal interest rate (there is no such rule that to specify the interest rate). Then all such income should be your wife’s income. It will not be clubbed with your income.

- There is no limit for Gift.

No extra deduction will be allowed.

Hi,

No, you will not be eligible for all these deductions over and above your own limit.

However, any expenditure is incurred to earn that income which is getting clubbed, then you can claim that expenditure as a deduction and net income will be clubbed. 

Hi

No ,deduction will not be clubbed over your limits.

Hope it helps