Hi, if I transfer a lumpsum amount to my wife's account and buy shares in her name.. Under the new law from this year dividend will be taxed at investors level so will i have to pay dividend based on my tax bracket or her tax bracket? Also what happens to the capital gains arising from that investment in shares - whose tax bracket will it be taxed on ? ( I pay 30% and she pays 18% tax ) also if i take a supplementary credit card in her name under me - will the expenses she makes on her credit card get cut from her income or mine ? Can she make the payment for the supplementary card herself?
The dividend would be clubbed in your income and hence would be taxed as per your tax bracket. Same goes for capital gain income.
It's better to show it as loan.
That would be personal expense and wont get cut from anyone's income.
Yes she can and it's will be personal use so it won't be that important to tax department unless you do a huge transaction.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
Dear sir
u can show the lump sum amt that u transfer to your wife as gift & as per income tax gift from relative is exempt.
& now if your wife invest this gifted amount anywhere then income from that investment will be taxable in ur wife hand.
No sir credit card expense is a personal expense & it will not be allowed as deduction under income tax act.
yes she can pay it & make sure she has some income showing in her income tax return.
u can take phone consultation if still u need any other clarification.
please rate 5 & provide valuable feedback so that I can improve my answer in future
Dear Sir,
Hope you are doing well !!
-Dividend income will be taxable in your hands due to clubbing provision.
-Capital gain will be taxable in your hands due to clubbing provision.
-No, deduction is not allowed for personal expenses.
-Yes, she can make the payment for the supplementary card herself.
Hi,
The provisions of clubbing will get attracted here and all practical purposes it will be treated as your income instead of your wife's income. This means that dividend and capital gain both will be taxed in your hands at the rate tax applicable to you.
Personal expenses doesn't get deducted from your income. Yes, she can make payment herself.
Hello,
The transaction mentioned would involve clubbing provisions, making the dividend income as well as the capital gain income to be taxable in your hands. Better transfer the fund as a loan or gift.
Making personal expenses on a credit card won't be deducted from the taxable income. Yes, she can make payments depending upon her income.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
- Clubbing provisions will attract. Income from dividend and gain on sale of shares will be clubbed in your hands.
- Dividend will be exempt upto Rs.10 lacs.
- Long term capital gain on sale of equity shares will be exempt upto Rs.1 lacs.
- No deduction of expenses from the above income will be allowed irrespective of usage of credit card.
- Yes she can make the payment of supplementary card.
If you transfer the amount to your wife the dividend will be taxable in your hands.
The credit card expenses can be claimed by her if they are pertaining to her business and the payment is made by her.
