F.D Gift Under Income Tax Act
Kumar Krishan Agarwal Advocate
(Querist) 15 May 2010
This query is : Resolved
Dear Sir,
1. I want to marry a girl but before marriage I want to transfer in F.D or want to give Rs 2 Lakhs to the bride for showing explicitly the safety proof of her life & living-hood in future if something mishap will occur to me after marriage.
2. Will the deduction of income tax will be deducted on Rs 2 Lakhs from assessee
OR
there is some other way to transfer the money on her name so that I will have exempted for paying any income tax amount on the 2 lakhs amount before marriage will be consummated?
3. What is the shrewd way to give the aforesaid amount to her without any income tax deductions before marriage?
Saurabh Bansal
(Expert) 15 May 2010
As per Sec 56(2),
nothing shall be taxable in the hands of the receiver if
-the sum is paid at the time of marriage...
and the sum is paid by the relative..
since, you are her spouse.
you can gift her the FD..
And this FD shall not be taxable in the hands of Your wife...
Saurabh Bansal
(Expert) 15 May 2010
however there are no specific and legitimised provisions regarding your situation...
there can only be tax evasion by different as prevalent in the market...which can't be discussed at this platform...
However, you can make ur situation suit the above provisions...
Vineet
(Expert) 16 May 2010
Any sum paid to would be spouse before marriage shall be taxable in her hand as income from other source as the same does not pass test of exemption u/s 56(2)(v).
By the way there will be no tax implication in the hands of donor neither any Tax exemption of deduction will be available to him for this gift.
When the marriage has been decided, the sum can be gifted to wife on very next day of marriage as gift without any tax implication as now the same will be treated as gift from relative and thus not taxable. There is no need to enter into any illegal or illegitimate way.
If the situation is demanding that you have to secure the girl before marriage itself and there is no escape route, get a joint FD made by your funds with provision of joint signatures as a measure of guarantee for a small period say till marriage date. Immediately after the marriage the maturity proceeds may be gifted to wife in any manner as you desire.
Vineet
(Expert) 16 May 2010
PS : Sorry Mr Bansal, once again please do not be in hurry while replying to a query. A wrong advice may lead to irreversible consequences.
AMIT BAJAJ ADVOCATE
(Expert) 16 May 2010
Yes I agree with the suggestion given by Mr Vineet. Get the F.D in the joint name if the circumstances are compelling.
If u gift F.D to your prospective wife before marriage it will be taxable in the hands of your prospective spouce.
You can gift it after marriage it will help as it wont be taxable in the hands of your spouce. However the interest income from the F.D (gifted after marriage)will still be taxable in your hands in such case as income arising from gift to spouce is clubbed with the income of the donor spouce u/s 64 of IT Act.
Krishnamurthy Ramdas Iyer
(Expert) 16 May 2010
before marriage it will be gift and donee liable for gift tax.
however the same may be given on or after marriage and in joint name FD or gift from spouse will save tax.
Kumar Thadhani
(Expert) 17 May 2010
Yes I do agree with all above experts .
