Clubbing of income tax

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  1. Harish Jindal

    Harish Jindal New Member

    Read the links: 1) 2) 3)

    In this case Shah rukh khan lent interest free loan to his wife and his wife purchase assets chargeable to wealth tax. ITAT ruled in favor of shahrukh since there was no transfer of assets, it was just interest free loan. The fact that his wife also had paid back part of the loan also helped this case.

    Similarly, e.g. if I lend my wife some amount as interest free loan and she invests in assets (e.g. FD) on which income is taxable. No clubbing of income as its an interest free loan (and NOT transfer of assets) and she is having her independent source of income and she will be repaying that loan to me from her independent source of income.

    Can Income Tax department reject this explanation? To me, the concept is similar. The court ruled that in whose name the assets is to be bought is family matter which is outside the purview of tax deptt. Similarly, what logic will they give to enforce clubbing of income tax from FD in this case?
  2. kamal kishor

    kamal kishor New Member

    If I made FD in favour of Wife in Joint Account and Wife is primary name and she is not filling itr and husband is filling ITR and do not want to clubb that income what is the rule
  3. V K Khanna

    V K Khanna Active Member

    The Interest income arising out of FD of the wife will attract clubbing provision and will be added with the Income of the husband and taxed as per slab rate applicable to him. There is no exception under the tax laws.
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