Taxation for a Housewife

Income Tax Income from Other Sources
1

Hi,

I’m a bit confused on how taxation works for Homemakers who recieve money from their direct relatives.

If the spouse deposits money on a regular basis to a savings account in the Homemakers name, will there be tax incurred w.r.t Clubbing of Income? and will the homemaker have to file IT returns every year?

Furthermore, if the Homemakers son/daughter also deposits money(either lumpsum or in regular deposits) to the savings account, does the clubbing happen with Spouse or the Son/daughter?

Thanks in Advance!

Regards,
AGP

2

Hi,
Every credit entry in a (savings bank) account is not considered as an Income, meaning, If i withdraw Rs.10,000 today and deposit Rs.1,000 daily for 10days,then these 10 deposits will not considered as my income. Usually income for an Indian, can be from

  1. Salary,
  2. Interest from SB account / FD account,
  3. Dividend from stocks,
  4. House rent,
  5. Capital gain by selling shares / any property / gold

(most of us would not have any royalty income, so i am not considering that here)

If the total income is less than Rs.2,50,000 then it would not raise any major issues. But, there are many conditions to it. say, if a person, receives Rs.2,50,000 only as a Dividend from stocks, then TDS would be deducted by some companies.

If this Rs.2,50,000 is received as STCG / LTCG, then taxes would be applicable based on date of purchase. Also, the taxation differs for rental income too, but, these are various ways an Indian can receive an Income. Just depositing money into an account cannot be considered as an income.

Simply put, just because someone is depositing money in an account does not automatically imply that, it is an income for a person.If, the total deposit in a financial year, is less than Rs.2,50,000 most probably it will not attract any queries

In a rare event, if any Tax authority asks a question :

  1. The person who received the money should have a proper explanation for those deposits.

  2. Should have a proper, legitimate proof for spending of that money.

3

Hi @AGP

If the tax is already being paid by the person(relative) on income earned by them then transferring money to the homemaker won’t be taxed again.

Provisions of clubbing are attracted if money is transferred to spouse without payment of tax in order to evade taxes.
To read more about it, you can refer to this article Clubbing of Income under section 64

Hope this helps.