8.    The Incomes of Spouses are Not Clubbed Together - HOW to Ensure ?

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One of the important aspects of tax planning is to ensure a steady income not only for oneself but also for other members of the family. Without proper tax planning, the income accruing, arising or received by an assessee’s wife might be clubbed with the income of the husband, thereby leading to a higher incidence of income tax. Similarly, the income of the husband could be clubbed with the income of the wife for income tax assessment in certain cases. Hence, proper tax planning demands the adoption of a legal device by which the income of a wife is not clubbed with the income of the husband and vice-versa.

For this it is necessary that a married lady’s income be from her own separate or independent sources. She can then be independently assessed in a separate income tax file, without her income being clubbed with that of her husband, and enjoy a separate exemption up to a taxable income of ` 2,00,000 in respect of her own income for the A. Y. 20 13- 2014. She may form the nucleus of her own funds by way of gifts from any relatives, excepting three persons; her husband, her father-in-law or mother-in-law. In the case of any gifts received from these three, even though gifts from relatives are in general exempt from gift-tax, the income arising directly or indirectly from them would not be considered her income but that of the husband, the father-in-law or the mother-in- law, as the case may be, for the levy of income tax. Thus, a married woman may receive gifts from her adult son, her father, mother, uncle, brother, sister or friend, etc. If this precaution is taken, the income arising to a housewife, or a married working lady, would be considered to be her own separate income. If her funds are insufficient, she may take loans and thus augment her investible resources. With the help of her own funds, collected either by way of gifts from relatives, or loans, she could also enter into a partnership and thus be assessed separately in respect of her share of the income from the firm as explained elsewhere in the book.


If the gift is made to the prospective wife or the prospective daughter-in-law, then too, there is no clubbing of income. In this manner one can develop funds through gifts, etc. before the date of marriage. Gifts from non-relatives without attracting income tax can now be received only upto
` 50,000 from the financial year 2006-07 in a year. This exemption is in respect of cash gifts as wells as gifts received in kind. However, on the occasion of marriage, gifts can be received from nonrelatives as tax-free.
 
Sec. 143(3) : Scrutiny Assessments by Income Tax Department
“Penalties” Under Income Tax Act. 1956
How is a Search Operation Conducted by Income Tax Department ?
Surveys for Checking Ostentatious Expenditure
Surveys for Enforcing Compliance with Provisions of TDS
“Summon” U/s 131 of Income Tax Act.
Investigation by Income Tax Department:
Appellate Authorities of Income Tax Department
Power to Call for Information U/s Sec. 133(6) of Income Tax Act.
Specific Surveys U/s 133A(1) of Income Tax Act.
Types Of Income Subject To TDS [Deduction Of Tax At Source]
Pre-Requisite For Claiming Income Tax Refund
Benefits of Filing Income Tax Returnsn
Section-139(9): Defective Tax Return
 
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