Do you transfer money to your wife's account to avoid tax? An expert makes a big revelation – News India Live | News India

Tax-saving tip: Everyone wants to save tax on their earnings and there are many ways to do this. But one method is most adopted by people and it is also popular. People transfer money to their wife's bank account to save tax. People adopt different methods to avoid tax. The second way is to transfer money to the wife's account. But there is no benefit in doing this. Let us know its advantages and disadvantages. You will get this information by answering the following question.

let's assume
That the husband transfers money to his wife's account, and the wife is a housewife, who invests the money received by the husband in mutual funds and stocks in her name, or spends it on a property. So who will claim capital gains tax on the sale of the property in the future, the husband or the wife

Answer
Experts say that Section 64(1)(iv) of the Income Tax Act provides that if a person directly or indirectly transfers his property to his spouse, then the income from such property is added to the income of that person. It is taxed. This is called the clubbing provision.

Therefore, if a husband transfers money to his wife's account, which the wife uses to invest in mutual funds or stocks in her name, the husband (i.e. the transferor) will get the income on such stocks and mutual funds in the form of dividend and interest or capital gains clubbed with the EVAC. Thus, if a husband invests his money directly in the name of his wife, the clubbing provision under section 64 of the IT Act will apply to him. Hence any income arising from such assets or capital gains arising on the transfer of such assets is clubbed.

second question
This is where a husband buys a house in his wife's name (money is transferred from the husband's account to the wife's account and the payment is made from the wife's account). In such a situation, who will pay the capital gains tax on the profit on the future sale of such a property? And, if this property is rented out, who will pay the tax on the rental income?

Answer
In this case, Section 27 of the IT Act provides that if a person transfers a house property to his spouse without any consideration, then in such a case the rental income or capital gain arising on that property is taxable only on the transfer of the property. Tax will have to be paid. Tax-saving tips: What to do to save tax?

• If a person transfers property in the name of his would-be wife before marriage then it will not come under the income clubbing provision.
• If you give money to your wife for expenses every month and she saves it, then that too will not be added to your income.
• You can also save tax by taking health insurance for your family. Under Section 80D of Income Tax, you can save up to Rs 25,000 on health insurance premium.
• You can also open a joint account for investing, just keep in mind that the primary holder should be the one who has lower tax liability, as the primary holder has to pay tax on the interest earned in the joint account.