If you send money to your wife every month for expenses, then this news is important for you. Due to a special income tax rule, your money can be accounted for. Know which mistakes are important to avoid.
Income Tax Rules: If you send money to your wife every month in cash or through UPI for household expenses, then you should be aware of some important rules related to income tax. Under Section 269SS and 269T of the Income Tax Act, in some situations, a tax notice can come on cash transactions. In such a situation, it is important to understand in which cases one should be cautious to avoid tax.
Income tax rules in cash transfer
Usually, the money given by the husband to his wife is not taxable. But if the wife invests this amount in fixed deposit (FD), property or stock market, then the income from this can be added to the husband’s income. In such a situation, it is important to follow the tax rules.
- If you give more than Rs 20,000 in cash to your wife, it may come under the radar of the tax department.
- Send amounts above Rs 20,000 through banking channels to avoid any kind of scrutiny.
- If the husband gives money to his wife as a gift, there is no tax on it.
What do Sections 269SS and 269T of the Income Tax Act say?
Some stringent provisions have been made in the Income Tax Act to control cash transactions and curb black money.
Section 269SS – Taking a cash loan, advance or deposit of more than Rs 20,000 is prohibited.
Section 269T – It is mandatory to repay a loan or deposit of more than Rs 20,000 through banking means.
How to avoid tax notice?
Transfer the amount given to the wife through banking channel instead of cash. Keep an eye on the investments made by the wife, so that there is no tax complication in future. Also, if you are transferring a large amount, show it as a gift deed, so that there is no legal trouble. If you follow these rules, you can avoid tax related problems and keep your financial position safe.
