Anil (b) 18 June 2008

Gift to Wife

1) Can a person gift money to his spouse without attracting Sec.64 of the Income Tax Act ? Note that the person does not genuinely would want to have any right over the money given to his spouse

2) A person has given money to his wife. The wife invests the money in NSC. In the given case Section 64 of Income Tax is attracted for the interest accrued on NSC.

I would like to know whether the person can claim deduction u/s 80C for the money invested in NSC. Note that the NSC certificates are in the name of his wife.Kindly answer pointwise in the order question is being asked.Thank you.

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3 Replies

Manish (CA) 19 June 2008

In my opinion:

1) sec 64 will be attracted on gifts to wife.

2) Income from the assets trf to wife is be clubbed with transferors income. However, if she invest the income so generated then income from further investment will be treated as her income.

3) NSC cannt be purchased in the name of the spouse to claim exemption.