Posted on: February 14, 2012 Author: Sudhir Kaushik
Money that you receive from a spouse is free from taxes, but once this money is invested, the income earned from that investment adds to the giver’s income and taxed appropriately. As an example, consider that you purchased a house on your wife's name. Any income earned from that house, whether in the form of capital gains on selling, or from rent, will add on to your taxable income. If your spouse didn’t contribute a share of money for buying the home, you shall be taxed for the entire income.
It is a good idea to invest in tax-exempt options like the PPF or tax-exempt bonds from infrastructure companies namely NHAI, IRFC, Hudco, etc. The investment limit of PPF is Rs 1 lakh. This is a total combined limit that applies for your child and you.
Here are the common reasons where you must cross-check before handing over your income tax return (as published in ET Wealth on Feb 13, 2012):
Sudhir Kaushik has been a practicing tax consultant for the last 17 years. He is a Fellow Chartered Accountant and conducts seminars in large companies to help salaried employees with income tax and investment queries. Sudhir brings domain knowledge of income tax laws and their compliance difficulties faced by individuals. He is the author of Income Tax Handbook For Salaried Employees for smart financial planning and investments for salaried people. He enjoys an excellent reputation and has a strong network in the corporate sector and public sector undertakings.
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