Dear Sir, During FY 2007~08 an amount totalling 11 lacs was gradually transfered (over a period of one year ) from my NRE acct to my wife's resident account.She invested it in shares over the same period.Further in next two to four years an additional 3 lacs were again gradually deposited in her bank acct and invested in shares. Presently She sold almost all of them in March'2017 for 14.52 lacs and transfered the amount to her bank acct. Now if she makes an investment using this sum,will the returns/profit so generated from it be clubbed with my income or hers.
Dear Sir,
Logically and legally yes it will be clubbed. However you can avoid the same by any of the following two ways :
a) Execute a gift deed in old date that the amount was gifted by you to your wife OR
b) Charge interest on the said fund from your wife to justify the genuineness of the case
Otherwise future as well current profit earned on such amount shall be clubbed with your income.
Dear Sir,
Clubbing provision in case of husband and wife are very stringent and in your case there are high chances that current and future profit will be clubbed in your hands and tax accordingly.
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
1) The income earned by your wife on the amounts transferred by you can be clubbed into your income u/s 64, even if you are a Non-Resident.
2) The income earned on the reinvestment of the income earned on orginal investment cannot be clubbed in your income. It will be assessed in her hands only.
Hi,
The Income will be treated as your Wife's Income only if you treat the Amount transferred to your wife as Gift.
It is advisable to file her IT Returns showing the amount transferred as Gift in her IT Returns. However, You can file returns from AY 2015-16 only now. That too 31-Mar-2017 is the ultimate deadline for Filing belated Returns of AY 2015-16.
Dear Sir Can one gift deed in old date,be executed for 15 to 17 approximate transaction /amounts totalling to 11 lakhs transferred in about 3 months time to wife's account. Thanks
Hi,
I am not sure whether this can be done. Also, since you are transferring amounts regularly, I suggest you to file wife's IT Return showing amounts received in respective years as Gift
I'm not sure how you can do it without going through the complete details with reference to the transactions you have already done and proposed to do.
Yes.
Execute a deed in old date for all transaction no problem.
Hi,
Clubbing provisions are attracted when you transfer any asset to your wife and your wife earns income out of it. This income earned by her will be clubbed along with your income, and you'll pay tax on both. In your case, you transferred money to your wife and she invested in equity shares. The long term capital gain arising out of the sale of shares will only be clubbed to your income. Even if you gift such money, and she invests in equity shares, the long term capital gain will be clubbed.
With this there can be no more clubbing. From the sale proceeds of such equity shares, whatever income she earns will not be clubbed. She will pay tax on it. Income earned out of previously clubbed income, is not clubbed again.
Trust this clarifies.
Do contact in case you require any further assistance or clarification.
Regards
Keerthiga Padmanabhan
M.Com., CA, LLB
Hello Sir,
Making a gift deed in an old date will be difficult as you will need a Stamp paper as on that date.
But yes, you can execute it with all those transactions.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
