How income tax clubbing provisions on gifted money can work in your favour
New Delhi, June 24 -- Income tax clubbing provisions usually come up as a warning. If you gift money to your spouse and they earn income on it, rules require that the income be added back to your income rather than theirs.
However, a recent judgment from a tax tribunal showed that the same rule can work the other way, and actually help you.
The case involved a Lucknow-based man who gifted about Rs.1.15 crore to his wife. The wife used the money to trade in futures and options (F&O), resulting in net losses. When the husband filed his income tax return (ITR), he claimed losses on his wife's F&O trades as his own and set them off against his income as per clubbing provisions.
The tax officer denied the claim, arguing that his wife had ru...
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