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POSTED BY ON April 2, 2015 6:28 pm COMMENTS (8)
Hello,
I have a query for which I could not find an answer in other queries/replies. My query is: My wife’s income earned thro’ bank FDs interest is clubbed in my hand. But, the bank has already deducted the applicable TDS on this FDs interest.
Now, how to include this TDS in my return as the TDS is being reflected in my wife’s form 26AS. Is there a way of linking and/or showing this TDS in my return? Is it sufficient if I mention in the relevant columns of my ITR my wife’s PAN and TDS amount?
Thanks in advance and regards,
Jibi
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TDS credit w.r.t of spouse’s Income clubbed in the hand of assesse is not allowed.
Provision :-
As per provision of section 199 read with rule 37BA(2)(i) Where under any provisions of the Act, the whole or any part of the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for the whole or any part of the tax deducted at source, as the case may be, shall be given to the other person and not to the deductee.
Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1)
Understanding:-
Say, Interest income of wife has been clubbed in the Return of Husband applying the clubbing provision of Income Tax Act, 1961. By virtue of section 199 read with rule 37BA(2)(i) TDS credit shall be given to Husband.
Issues:-
In similar situation, many assessees have received the Scrutiny/Demand notice under Income Tax provisions. we also noticed that Officer does not appreciate the fact and not willing to give the credit of TDS of other person claimed as per provision of 199 read with rule 37BA(2)(i).
Hello,
My wife is a non working woman. I have made few FDs in her name and the interest credited to her name in the Bank A/C details. If I add those incomes of my wife and file ITR file in her name mentioning the income as other sources of income — is everything done? What the Income Tax Rules say?
Thanks & regards,
Abhijit Saha
To my knowledge, Dependent’s income is not automatically clubbed. If I am a salaried employee, only my emoluments are taxed and they reflect in my 26AS. They may not know about the incomes etc of my dependents. If I advise the to deduct more tax, in lieu of dependent’s income, they will do so, but that gets reflected in 26 AS. In light of this please explain ” My wife’s income earned thro’ bank FDs interest is clubbed in my hand”. Is it that you are clubbing the same while declaring your returns?
If above is the case, your wife’s income can be shown as income from other sources and tax can be calculated and return can be filed.
Dear ap16j55,
The fact is: I have invested in bank in my wife’s name fully knowing that the income so earned is clubbed in my hand (let us not go into the details of why it is so etc). So, now, while filing my return when I include this income 9from other sources) and pay tax, then, how I can show the TDS that is already deducted by the bank as reflected in my wife’s 26AS?
Thanks and regards
Jibi
First, is the money(deposited) deducted from your account or a cash deposit. If it is cash, there will be no issue. If it is a deposit from your account, you can approach this in 2 ways. It can be a gift you gave to your wife in which case clubbing applies or you could have given a loan to your wife @4-5% so that she can do what ever she wants with it. In this case, she could have paid interest monthly with a receipt from you. If this is followed, she can pay balance tax if any, after TDS and you can pay tax on her payment to you as other income.
You can not show wife’s tds in your ITD. Pay income tax and later on claim refund for tds deducted. I think this is the only way out.
We both wife & husband are IT payers, TDS was deducted by bank for both on the interest earned from the deposits on my wife’s name . How to avoid this.
You cant.
You can only adjust it in the taxes you pay or claim it back while filing ITR