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Income From Joint Accounts Or Joint Investments by NRI : Is it Liable To Be Clubbed For Tax Purposes in case of NRI ?

[How an NRI can Avoid Clubbing of his Incomes and Wealth with that of his Spouse and Children]

Very often it is found that a non-resident maintains a bank account jointly with his wife and/or children. Similarly, it is seen that a nonresident Indian buying shares or debentures or house property or other movable or immovable property, keeps them in his own name jointly with his wife or any other member of the family. In this connection, a non-resident should remember that the maintenance of joint bank accounts or holding of joint investments alone would not make the income liable to assessment separately in the hands of the persons in whose name the joint accounts are kept or who hold the joint investments. Thus, the mere fact that an account is held jointly or that an investment is held by two or more persons together would not affect the liability to income tax or wealth tax. The main criterion of deciding as to the correct persons who are to be responsible for paying income tax in respect of the income ofjoint accounts or joint investments is the true ownership of such accounts or investments. For example, if a nonresident Indian, out of money belonging to him, is operating a bank account or a bank fixed deposit account jointly with his wife, he alone would be liable to income tax, if any, in respect of the income from such an account. Likewise, if a non-resident Indian out of funds belonging to him makes a joint investment in shares of Indian companies, he alone, would he liable to income tax, if any, in respect of the dividend income from shares so held. If, however, a joint bank account or joint investment is out of money belonging to the persons actually owning the funds, then the extent of their individual ownership in the joint account would be considered for income tax and wealth tax for individual tax purposes separately.

 

For example, if a non-resident Indian invests `. 4,00,000 in the HUDCO Bonds, and his wife invests `. 2,00,000  out of funds belonging to her in buying HUDCO Bonds and these Bonds worth ` 6,00,000 are held in joint names of the husband and the wife, the income on such Bonds would be liable to be treated separately in the individual assessment of the husband and the wife in the ratio of 2:1.
How an NRI can Avoid Clubbing of his Incomes and Wealth with that of his Spouse and Children !
1. Income From Joint Accounts Or Joint Investments by NRI : Is it Liable To Be Clubbed For Tax Purposes in case of NRI ?
2. When is the income of wife liable to be clubbed with the income of her husband, and vice versa ? in case of NRI
3. When is the income of a Minor Child liable to be Clubbed with that of a Parent in case of NRI ?
4. When is the Income of Daughter-In-Law Liable to be Clubbed with that of her Father-In-Law or Mother- In-Law in case of NRI ?
5. Income of a Major Child cannot be Clubbed with that of his Parent in case of NRI
6. When is the Income Of An HUF From Self-Converted Assets Liable To Be Clubbed In The Members’ Hands in case of NRI ?
7. When is income from Assets Received on Partial Partition of an HUF liable to be Clubbed with the Income of the HUF in case of NRI ?
8. Joint Ownership Of House Property: Does It Make The Income Of A Husband, Wife, And Children Liable To Be Clubbed Together in case of NRI?
9.  How To Avoid Clubbing Of The Wife’s Wealth With That Of The Husband’s In Case Of NRI
10. Gift From Non-Relatives Now Taxed As Income In Case Of NRI

More... Topics !..

 

Tax Guide for NRI - Tax Planning, Tax Saving, Investment Guidance for Non-Resident Indians !

1. Basic Aspects Of Tax Planning For NRIs
2. How an NRI can Avoid Clubbing of his Incomes and Wealth with that of his Spouse and Children
3. The Incomes of an NRI completely Exempt from Income Tax
4. Capital Gain of an NRI could be Completely Exempt from Income Tax
5. Items completely Exempt from Wealth Tax for an NRI
6. Special Procedure of Assessment regarding Income of an NRI from Foreign Exchange Assets
7. Deductions Allowed to NRIs in the Computation of Total Income and Tax Payable
8. Procedure for the Filing of Income Tax and Wealth Tax Returns, Assessment, and Refunds
9. Gifts by NRIs to Relatives and Friends can be made fully Exempt from Gift Tax
10. FEMA and NRIs Preliminary Aspects Analysed
11. Acquisition and Transfer of Immovable Property in India by NRIs and FEMA
12. Permissible and Prohibited Current Account Transactions in Case of NRI
13. Investment In Shares, Securities, Units And Other Activities, etc. by an NRI in India
14. Deposits in India by an NRI
15. RFC account of a Returning NRI and Investment Abroad
   
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