Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Sanjeev

Sanjeev Govila  | Answer  |Ask -

Financial Planner - Answered on Jul 23, 2023

Colonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives, a financial planning company dedicated to the armed forces personnel and their families.
He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.... more
Prasanna Question by Prasanna on Jul 21, 2023Hindi
Listen
Money

Sir, I am prasanna , retiring from Central Govt service shortly. Retirement benefits to the tune of about 65 lakhs , I want to transfer it to the account of my wife. What will be the tax implication. Whether this decision is prudent or not. Just I want to make my wife financially independent I smy motto of transferring the amount

Ans: The tax implications of transferring retirement benefits to a spouse in India:-

Gift tax: Gifts between spouses are exempt from gift tax, so you will not have to pay any gift tax when you transfer your retirement benefits to your spouse.

Clubbing provisions: All the income arising from the assets gifted to your spouse will be clubbed with your income and taxed in your hands. This means that you will be taxed on the interest income, capital gains, etc, arising from the investments made with the gifted amount.

All-in-all, you may not find much benefit of transferring the money to your spouse with an added headache of showing spouse’s income from such assets in your name when the TDS etc would have been deducted in her name.
We do not recommend you to do it.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
Money

You may like to see similar questions and answers below

Hardik

Hardik Parikh  | Answer  |Ask -

Tax, Mutual Fund Expert - Answered on Jul 27, 2023

Listen
Money
Hardik Sir, i am retiring from Govt services shortly, all the pension benefits which i get , i would like to give it to my wife, will there be any tax implication to her for this one time transaction. Whether it is advantageous or dis advantageous to transfer to wife as one time gift, i want her to take the responsibility of this amount of around 60 lakhs.
Ans: Dear Prasanna,

Firstly, congratulations on your upcoming retirement. It's a significant milestone, and I'm here to help you navigate the financial aspects of it.

Now, coming to your question about transferring your pension benefits to your wife. As per the Income Tax laws in India, any gift received from specified relatives, such as a spouse, is not treated as income. Therefore, it is fully exempt from income tax. So, if you decide to give your pension benefits to your wife as a one-time gift, there won't be any immediate tax implications for her.

However, there's an important aspect to consider. While the gift itself is tax-free, any income generated from this gift (for example, if your wife invests this amount and earns interest or dividends) would be clubbed with the income of the giver, i.e., you, and taxed accordingly. This is known as the clubbing of income.

In conclusion, gifting your pension benefits to your wife could be a good idea if the aim is to let her manage the funds. However, the income generated from the gifted amount would still be taxable in your hands.

I hope this clarifies your query.

Best,
Hardik

..Read more

Latest Questions
T S Khurana

T S Khurana   |197 Answers  |Ask -

Tax Expert - Answered on Nov 23, 2024

Asked by Anonymous - May 11, 2024Hindi
Listen
Money
Can you please suggest on capital gains as per Indian taxation laws arising in the below two queries : 1) property purchased with joint ownership, me and my wife’s name in 2015 at a cost of 64,80,000, housing improvements done for the cost of 1000000 and brokerages of 200000 paid and sold the same property at 10000000 in Dec 2023? 2) 87% of the proceeds got from the deal i.e 8700000, have been reinvested to pay 25% amount in purchasing another joint ownership property in Dec 2023, 3) I have invested in another under construction property in Nov 2023 by taking housing loan, which is on me and my wife’s name worth 1.4 cr, here the primary applicant is me only while wife is just made a Co applicant in the builder buyer agreement and also on the housing loan . So what are the LTCG tax liabilities arising from the above 3 scenarios for FY 2023-2024 and FY 2024-2025. I intend to sale off the property acquired in (2) by Dec 2024 and use that proceeds to close the housing loan for the property acquired in (3), will this sale of property be inviting any tax liabilities if the complete proceeds received from the sale of the property in (2) would be utilised to close the housing loan taken in Nov 2023 for the property in (3) ? Since in FY 23-24, I would be claiming the LTCG from the sale proceeds of 1) invested in the purchase of property in 2), and I intend to sale off this property in Dec 2024, will the LTCG claim be forfeited on the property sale in (1), should I hold this property at least for further 1 year so that sale of this property in 2) will not invite STCG?
Ans: (A). Let's first talk about F/Y 2023-24 :
You jointly sold a Property during the year for Rs.76.80 lakhs (64.80+10.00+2.00), & sold the same for Rs.100.00 lakhs.
You have jointly also purchased Property No.3 (I suppose it is Residential only), for Rs.140.00 lakhs.
You should avail exemption u/s-54 & file your ITR accordingly. Please disclose all details about sale & purchase in your ITR.
02. Now coming to the F/Y 2024-25 :
You intend to Sell Property No.2, which was acquired in 2023-24. Any Gain on Sale of it would be Short Term capital Gains & taxed accordingly.
Alternatively, you may hold this sale of property no.2 (for 2 years from its purchase) & avoid STCG
You are free to utilize the sale proceeds in a way you like, including paying off your housing Loan.
Please note to avail exemption u/s 54 only from investment in property no.3 & not 2.
Most welcome for any further clarifications. Thanks.

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x