Tax filing by housewife

Taxation
1

My wife invests in share market from the money I have given her for household expenditure and I have filed my it return. She incurred some stcg, some ltcg and dividend along with some bank interest. So she has to file itr2. Now my question to taxgurus here -

1)is it required by her to mention the money she received for house expenditure in her it return , and if the answer is yes then where should she mention it?
2) Where should she show the interest received from gold bond and RBI bond?

2

No, declaring source of money is not necessary.

Income from other sources

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3

In case your returns are scrutinized, the income tax officer might also opine that the income from your wife’s investments has to be clubbed into your income for the computation of taxes.

Here is an extract from the income tax act below that talks about the clubbing of incomes:

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Also adding the @Quicko team to share their views.

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4

@mohitmehra / @quicko

Doesnt clause ii of section 64 shared above,
already exclude clubbing of income a spouse earns on their own “knowledge and experience” ?

Also, the clause (iv) quoted above,
appears to apply only on income from any asset
transferred from the individual to the housewife (eg. rent on house-property.)
Reference: Section 27 quoted in Section 64 clause (iv).

My wife invests in share market from the money I have given her for household expenditure

So, no mandatory clubbing of income in this case.
Right?

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5

This is known as ‘pin money’ and this can be invested as her wish and returns from such investment need not be clubbed with the husband’s income.

You can google more about ‘pin money’.

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6

Interesting and useful answers suggested here. Thanks to all.
@mohitmehra I would just like to know if she mentions this house expenditure money in her return , would they still club it? And again where should she mention it?

7

Hi @Nalak

  1. Household expenditure is not required to be disclosed in the ITR.
  2. Interest received should be disclosed under IFOS > Interest income.

The money invested by your wife from the savings of household expenses will not be clubbed.

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8

A quick question. My wife is an house wife and has made intra day profits Rs 1100 and short term profit .217. She has no other income than her own savings. Is it necessary to file IT retn.
Second , can she file it in ITR2 without reducing income.

9

What if the husband gives the money as loan to wife?

A letter stating that loan is given to wife.

if the wife earns interest or any income from that loan, will that be clubbed with husbands income?

10

No, if this is her whole year income then she doesn’t have to file any tax return.