Skip to content

Main Navigation

  • Home
  • Articles
  • Legal News
  • International
    • News
    • Events
    • Journals
  • Law Reviews
  • Tutorials
  • Case Brief
  • FAQs
  • Legal Advise
  • Law Events
    • Call for Papers
    • Moot Courts
    • Seminar
    • Legal Conference
    • Law Fest
  • Law Colleges
  • Law Books
    • Buy Books
  • Join News Box
lawyerslaw-logo
Skip to content

Main Navigation

  • About Us
  • Contributors
  • Contact Us
  • Join Us
    • Research Interns
    • Student Reporters
  • News Box
News Ticker
  • The 2024 UN Conference on Space Law and Policy: Navigating the Future of Space Governance
  • Reforming Waqf: A Comprehensive Look at the Waqf Amendment Bill 2024 and Its Impact on Property Management in India
  • Comprehensive Analysis of The Press and Registration of Periodicals Act, 2023
  • A Comprehensive Review of the Bharatiya Nyaya Sanhita, 2023
  • The Bhartiya Sakshya Adhiniyam 2023 : In-Depth Review
2024 UN Conference on Space Law and Policy Overview
Legal News International International News Space Laws

The 2024 UN Conference on Space Law and Policy: Navigating the Future of Space Governance

Waqf Amendment Bill 2024
Property Laws Articles Legal News Religious Law

Reforming Waqf: A Comprehensive Look at the Waqf Amendment Bill 2024 and Its Impact on Property Management in India

Comprehensive Analysis of The Press and Registration of Periodicals Act, 2023
Bare Acts Reviews Information Technology Law Legal News

Comprehensive Analysis of The Press and Registration of Periodicals Act, 2023

Bharatiya Nyaya Sanhita 2023
Legal News Bare Acts Reviews Criminal Laws

A Comprehensive Review of the Bharatiya Nyaya Sanhita, 2023

Legal News Bare Acts Reviews Criminal Laws

The Bhartiya Sakshya Adhiniyam 2023 : In-Depth Review

  • Home
  • Legal FAQs I want to transfer money to my wife’s account. But who will pay the tax for the amount and interest accrued on fixed deposits?

I want to transfer money to my wife’s account. But who will pay the tax for the amount and interest accrued on fixed deposits?

424 views April 1, 2015 Administrator
Q. I have 15 lakhs white money in my saving bank account. I want to transfer it to my wife’s personal account as a fixed deposit. Will she need to pay income tax for that amount or the monthly interest for that amount?

A. As per Income Tax Act, interest is also a source of income and the interest source is considered under head “other sources of income” of an individual. Bank Authorities are mandated under the Income tax Act to deduct the income tax at source on the fixed deposits if the amount exceeds the limit specified by the Income Tax Act.  Tax will be deducted by the banks when the interest income exceeds Rs. 10,000/- in a financial year.  Generally tax will be deducted at source.  However, the tax rates on the income accrued also depends on the tax slab of the individual which is based on the earnings of overall income of the individual on an annual basis.

The question here asked comes under the concept of clubbing of income.  Section 64 of the Income Tax Act, 1961 defines the under subsection (1) clause iv, the extract of which is given hereunder:

Income from assets transferred to spouse becomes taxable under provisions of section 64 (1) (iv) if following conditions satisfied:

  • The taxpayer is an individual
  • The asset is transferred to his/her spouse (not house property).
  • The asset is transferred without adequate consideration.
  • There is no agreement between them to live apart.

The income raised from the transferred deemed to be the property of the tax payers if the above conditions are satisfied

As per the concept of clubbing of income under Income Tax Act, income accrued from the fixed deposits you made in the name of your spouse will be clubbed again to your income for taxation purpose.  Such income is not clubbed with the income of your spouse.  Even though you transfer your amount to your wife’s account (whether she is working or not working) and invested on fixed deposits, the taxation will be done on the original owner.  However, this is not the case of compounded income. Compounded income is the income arising out of the clubbed income, but is not clubbed to the original owner’s income for taxation purpose.  For example:  in your question, income accrued on fixed deposits in your wife’s account, clubbed to your income.  However, income earned from the fixed deposit interest by the way of any investment will not be clubbed in to your income, but will be clubbed in to income of your spouse.

Therefore, if you are a tax payer, and depending upon the amount of income accrued in a financial year from all the heads of tax sources of you, and based on the tax slab you fall under, the tax will be deducted on the last date of the financial year or TDS will be deducted on the interest accrued by the way of fixed deposits at the end of the financially year by the banks.

By Anitha Gutti

Post navigation

 Shall i file petition directly or through an advocate in a family Court?High Court of Kerala has upheld the government liquor policy, dismisses Bar Hotels owners plea 

Subscribe Newsletter

Subscribe Our Newsletter to get latest law updates in your mail box.

All about Indian Laws; Legal News India, Law reviews, Legal Articles, Legal FAQ's, Law Events, Case Comments/Case Briefs, Law Book Reviews, and More.

Search with in this website

Categories

  • Agriculture Laws
  • Air Traffic Laws
  • Anti-Corruption Laws
  • Arbitration Laws
  • Articles
  • Banking Laws
  • Bare Acts Reviews
  • Bill Reviews
  • Buy Law Books
  • Call for Papers
  • Case Brief
  • Children Related Laws
  • Civil Laws
  • Constitutional Law
  • Consumer Laws
  • Contract Laws
  • Corporate Law
  • Court Laws
  • Criminal Laws
  • Debate Competition
  • Education Laws
  • Election Laws
  • Environment Law
  • Excise Laws
  • Family Law
  • Financial law
  • Foreign Exchange Laws
  • Foreign Laws
  • Health Laws
  • Human Rights Laws
  • Immigration Laws
  • Indirect Tax Laws
  • Industrial Laws
  • Information Technology Law
  • Insurance Laws
  • Intellectual Property Laws
  • International
  • International Events
  • International Journals
  • International News
  • Journals
  • Labour Laws
  • Land Laws
  • Law Books
  • Law Colleges
  • Law Events
  • Law Fest
  • Law Reviews
  • Legal and Professional Law
  • Legal Conference
  • Legal FAQs
  • Legal News
  • Legal Software
  • Legal Workshop
  • Maritime Laws
  • Marriage / Divorce Laws
  • Media Laws
  • Medical Laws
  • Military Laws
  • Miscellaneous Laws
  • Moot Courts
  • Motor Vehicle Laws
  • NRI Laws
  • Property Laws
  • Railway Laws
  • Religious Law
  • RTI Laws
  • Seminar
  • Service and Labour Laws
  • Social Justice and Empowerment Laws
  • Space Laws
  • Sports
  • States Reorganization Laws
  • Surrogacy Laws
  • Taxation Laws
  • Technology Laws
  • Telecommunication Laws
  • United Nations
  • Women Related Laws
  • Writing Competition

Recent Legal Updates

  • The 2024 UN Conference on Space Law and Policy: Navigating the Future of Space Governance
  • Reforming Waqf: A Comprehensive Look at the Waqf Amendment Bill 2024 and Its Impact on Property Management in India
  • Comprehensive Analysis of The Press and Registration of Periodicals Act, 2023
  • A Comprehensive Review of the Bharatiya Nyaya Sanhita, 2023
  • The Bhartiya Sakshya Adhiniyam 2023 : In-Depth Review

About Us, Contributors, Contact Us, Join Us

  • About Us
  • Contributors
  • Contact Us
  • Join Us
    • Research Interns
    • Student Reporters
  • News Box

Navigate

  • Home
  • Articles
  • Legal News
  • International
    • News
    • Events
    • Journals
  • Law Reviews
  • Tutorials
  • Case Brief
  • FAQs
  • Legal Advise
  • Law Events
    • Call for Papers
    • Moot Courts
    • Seminar
    • Legal Conference
    • Law Fest
  • Law Colleges
  • Law Books
    • Buy Books
  • Join News Box

Connect Us

like us in facebook follow us in twitter

Disclaimers, Privacy Policies, Terms of Service, Advertise

  • Disclaimers
  • Privacy Policies
  • Terms of Service
  • Advertise with us

Website Optimization Partner

Spotupp Digital Promotions Pvt Ltd.

Editorial Team

  • Adv. Mikky Sudhakaran, BCom, LLB, LLM.

  • LawyersLaw.org

XML Sitemap

Sitemap
Copyright © 2024-25 Lawyerslaw.org
  • About Us
  • Contributors
  • Contact Us
  • Join Us
  • News Box