lexbery (d) 24 April 2014

Tax on joint fd before marrige with to-be wife

Dear Sir,

1. I want to make a F.D Rs 20 Lakhs(from my personal funds) in joint name with my to-be wife's before marriage,her as 1st name,mine 2nd name, for showing explicitly the safety proof of her life & living-hood in future if something mishap will occur to me after marriage.

what is the tax ability in the above scenario?both for me and her?gift tax applicable??
is there is some other way to transfer the money on her name so that I will have exempted for paying any income tax amount before marriage will be consummated?

if the marriage is,say, after 6 months from the day of making this joint fd,is their any legal problem,should it be made around marriage date???do i or she have to make any declaration in stamp paper for this purpose??

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2 Replies

Mahesh V.P. (Advocate) 13 June 2014

Your generosity will not be appreciated by the taxman, deposit in joint accounts is deemed as gift and from 1^st Oct 2009 the newly introduced section 56(2)(vii) of the Income Tax Act will tax the deposit as income in the hands of your would be wife, however if you make the deposit after your marriage, your spouse becomes a ‘relative’ and is exempted.

Legal documentation is not necessary for deposit in wife’s name.

Attached File : 321950932 gifts under income tax act.pdf downloaded: 148 times

lexbery (d) 24 June 2014

DEAR SIR,''

if taxability appllies then why is the provision of no tax on the occasion of marriage?what if i make this fd 2-5 day before our marriage??when is no tax applicable on the occasion of marriage?is this two contrary?

also after marriage their will be the clubbing provision.so that no feasable