Tax Saving: People take many measures to save tax. Like transferring your money to your wife’s account. Or many times you might have given money to your wife to help her in some business or trade. But, does this money transaction come under the purview of income tax? Is it really possible to save your tax by doing this? If you also do not have the information, then know under which circumstances you can save money by transferring money to your wife’s account.
There is a provision for clubbing of income under sections 60 to 64 of the Income Tax Department. When tax is deducted on someone’s taxable income which is given to you, it is called clubbing of income. However, this rule of the Income Tax Department applies only to individual taxpayers.
There is another important provision related to this in Income Tax. Which is related to rental income. Like there is any property in your name. If the rent comes to your wife’s account then the rule of Transfer of Income without Transfer of Asset will be applicable on it. That means the rent will be directly added to your rental income.
If you want to save income tax in the name of your wife, then those who are going to get married, if they make any property or gift in the name of their future wife before marriage, then it will not come under the provision of clubbing of income.
Besides this, you give money to your wife every month for expenses, she saves that money. Then this money will not come under the purview of income tax.
Under Section 80D of Income Tax, if you pay the health insurance premium in your wife’s name, you can save up to Rs 25 thousand.
You can also save your money by opening a joint account in the bank. But, there is a trick to be used in this. The primary holder of the account should be the one whose tax liability is less. This will save the interest money from going to tax.