Women’s Day 2022: Tax rules say that any investment made by the husband in the name of the wife will be treated as a gift.
Women’s Day 2022: International Women’s Day is celebrated every year on 8 March. If you want to give a gift to your wife on the occasion of Women’s Day this time, then investing in her name can be a better option. However, you must be aware of how the income from such investments is taxed.
Tax rules state that any investment made by the husband in the name of the wife will be treated as a gift. According to Chirag Nangia, Director, Nangia Andersen India, the wife has to disclose the investment amount as exempted income in Schedule EI of the Income Tax Return (ITR) form. For example, if the husband has invested in the Senior Citizen Savings Scheme (SCSS) in the name of the wife, the interest income will be added to the Schedule SPI of ITR to his total income. However, according to Nangia, the wife is not required to disclose the income so accumulated.
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Tax on cash gifts received from relatives
According to the Income Tax rules, cash gifts received from relatives are completely tax free. It is also told here who will come under the relative’s circle. It states that husband or wife, brother or sister, brother or sister of husband or wife. Hereditary relative of a person Any hereditary relative of the spouse, comes under the purview of relatives.
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Tax on cash gifts from others
As per section 56(2)(x) of the Income Tax Act, 1961, if the total wealth received by an individual without any consideration during a financial year exceeds Rs.50,000, then it is liable to be taxed. Such amount is taxed as “Income from other sources”.
According to Dr Suresh Surana, Founder, RSM India, if the total cash received from one or more people in a financial year exceeds Rs 50,000, then such amount will be taxed as per the applicable slab rate. Therefore, to avoid tax, the total amount of gifts received in a financial year should not exceed Rs.50,000.
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