Tax on Gift to Wife for Investing in Bank FD

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  1. AKD

    AKD Member

    Is there any provision under which a husband can legally gift cash to his wife to enable her to invest in bank fd /small savings/equity/ mf etc in her own name to earn some return for which she will be liable to pay income tax and not the husband ?
    If yes, what is the relevant Act/Rule and since when it has come into effect ?
     
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    1. Amount gifted to wife would be exempted from the levy of income tax
    2. However, the interest arising on this FD would be taxed in your hands and not in the hands of your wife (Provisions for Clubbing of Income will apply)
     
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