Income Tax Saving Tips: Taxpayers definitely adopt some measure to save tax. Similarly, you can also save tax by transferring money to your wife’s account. However, it is also necessary to follow some rules for this. This method of saving tax comes under the ‘clubbing provision’
Income Tax Save: There are many ways to save tax. For this, people go to CA. There are many such rules in the Income Tax Act, which can be easily taken advantage of. Although taxpayers have to pay tax on their income, but many times to reduce it, they transfer some part of their income or any property from which income is generated. In the name of their life partner or minor children. For such situations, the provision of clubbing of income has been implemented in the Income Tax Act.
Overall, the way to save tax by putting money in the wife’s account comes under the ‘clubbing provision’. If you make any investment in your wife’s name or deposit money in her account, then there can be some benefits of it.
Know what is the rule in clubbing provision
There is a provision of “clubbing of income” in sections 60 to 64 of the Income Tax Act. If tax is deducted in your name on income received from any place, then it is called clubbing of income, this rule applies to individual taxpayers. In simple words, if under any circumstances you give money to your wife and that money earns interest or dividend, then that income will be added to your income. Tax is levied on it. This is called ‘clubbing provision’. But if you gift this amount to your wife, then no tax is levied on it. However, the clubbing rule will apply on the profit earned from it.
Ways to save tax through investment
If your wife’s income is low or no, then you can invest in her name. Such as fixed deposit, mutual fund, or PPF. This will reduce the tax on income.
Transfer to savings account
By depositing money in your wife’s savings account, you can save tax on the interest received on it. Income tax exemption of up to Rs 10,000 is available on savings account interest.
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