Weekend QA: If Wife Invests Gifted Money From Husband, What Are The Tax Provisions?

An individual has to file his ITR in India if his taxable income does not exceed the threshold limit of exemption, which is Rs. 2.50 lakhs under the old tax regime and Rs. 3 lakhs if one opts for the new tax regime. Since your son is a non-resident, his Indian income will only be taxed in India. He will have to file his ITR in India if his Indian income exceeds the amount of basic exemption. Please note that interest on an NRE account is exempt and only the interest received on an NRO account is taxable in India. He can still file his ITR if he wants to claim the refund of TDS.

Sorry to hear about your personal loss. Yes. You will have to file her ITR for the financial year 2024-205 till the date of her death as her legal heir. Moreover, in case she had written a valid will, an ITR as the estate of your late wife also will have to be filed every year by the executors from the date of her death till the final distribution of her estate as per her will take place. Since you already have 30 lakhs, the maximum amount one can invest in SCSS, in your own SCSS, you cannot continue her SCSS account.

There is no tax incidence at the time of giving the gifts as any gift received from a specified relative including spouse is not to be treated as income. Any income earned from an asset transferred to one’s spouse, without adequate consideration, is subjected to clubbing provisions. The income arising to the spouse from the asset gifted is required to be included in the income of the transferor spouse. So the interest income on the fixed deposit made by your wife, out of the gifted money, shall be taxed in your hands. The clubbing provisions apply only to the income relatable to the asset transferred and not to the subsequent stream of income on the income which has already been clubbed once and reinvested. So, if your wife re-invests the interest income in any other income-bearing instrument and earns income from that, the second generation of income shall not be subject to clubbing and will be taxable in her hands only. In case the gift made is used by your wife for household expenses or is otherwise spent by her, no clubbing provisions will apply as there is no generation of income on the gift made by you.