It is a common demand with lot of practical relevance and need a sensible & personalized by individual approach. The Taxpayee doesn’t have any benefits without investments from Income Tax. In a family, flow of funds plays a very vital role in tax-ability and accrual of income therefrom. Under the Income Tax Act-1961, the movement of funds also determines the admissibility & availability of deduction. By whom or in whose name the amount should be invested vary significantly depending upon various factors as under:
- Applicable Income Tax Slab of the individuals investor of relevant Assessment Year
- Nature of Investment for Long or Short Term Capital Gain
- Nature of Earning of Income whether it is Tax Free or Taxable
- Risk Element involved therein
- Present & Future Income comes out from investment etc.
The investment in the name of wife or husband or major/minor child need to be done after considering various other factors also & it is practically impossible to standardize or advise it in totality in an isolated manner.
Normally, most of the deductions are admissible subject to the condition of payment. The deduction u/s 80C towards the repayment of the principal portion of housing loan would not be available to wife when-
Normally, most of the deductions are admissible subject to the condition of payment. The deduction u/s 80C towards the repayment of the principal portion of housing loan would not be available to wife when-
- the husband pays the amount
- the same is paid by & on his own behalf by the husband and
- the amount appears to be non recoverable from wife.
However, if the correct accounting treatment is given in the books & Balance-sheet to show that the amount though paid by husband is indeed paid on behalf of the wife as well and the same is recoverable or adjustable against other amount, the wife could also claim the deductions. The same is the case with the claim towards interest on housing loan.
