Income Tax Notice: If you transfer money to your wife for the house, then income tax notice will come home...
During the Corona period, most people have adopted digital payment. People like to make online payments for every small and big thing. Even people are either buying household vegetables and ration online (Online Shopping) or at least paying for them online. In such a situation, there are many people who transfer money to their wife's account for household expenses.
Now, if we add up all the small and big tasks like household ration, vegetables, milk bill, paper bill, water bill, and maid's salary, then a good amount of money is reaching the wife's account every month. Now a question is arising in the minds of people whether the wife will also have to pay tax for this. If you don't do this, will you get a notice from the Income Tax Department? Let us clear up your confusion.
There will be no tax on monthly expenses-
If a man transfers money to his wife for household expenses, then no tax will be levied on the wife. This means that no notice from the Income Tax Department will come against the wife. The reason for this is that the husband's money is being taxed and income tax is not being imposed twice on the same money. The money given to the wife for household expenses will be considered as the husband's earnings and will be taxed.
Tax will be levied if the wife invests money somewhere.
If the money received by the wife from her husband for household expenses is invested somewhere, then the income earned from it will become taxable. That is, if the wife deposits the money left after household expenses in an FD or invests it in the stock market or anywhere else and earns some money from it, then it will be considered as the wife's income. However, the wife will also get the benefit of all tax exemptions, but she will have to file an ITR.
Money given to the wife is considered a gift-
If seen from the income tax law, the money given to the wife is considered a gift. The wife comes under the category of relatives, hence there is no tax on the money given to the wife. However, the husband will not get any tax exemption on this. That means the wife will not have to pay tax and at the same time the husband's tax liability will remain and he will have to pay tax as per his slab.
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