Trading in CM, F&O in Wife's name A/c

#1
If some one's total income including from stock market CM, F&O (SCG) near 2.5 Laks and at this point, if he stops trading in his PAN card and starts Trading in his wife name by transferring all funds to wife A/c.

Will this save tax ?
 

carnot11

Active Member
#2
Hi prosenjit,

In the eyes of the Indian legal system, you and your wife are separate individuals.

If income of an individual exceeds the taxable limit, he or she is obliged or to be more specific it is mandatory as per the income tax act to pay tax and file returns.

Trading in your name or your wife's name does not matter, who operates the account also does not matter.

What matters is the status of the individual as per the income tax act.

Enjoy,
CArnot
 
#3
CArnot gave a to the point reply.
Like to add
The source of capital that your wife will use for trading will be of great importance. So take care for this also.
 

candle

Well-Known Member
#4
If you transfer funds from your account to your wife's account for the purpose of trading, ( ofcourse having a different pan number for her), then all the earnings made in her name will be counted in your pan account and will be added to your earnings; will be taxed to you. Beware friend... Enjoy:D
 

alokdaga

Active Member
#5
If you give a loan to your wife for trading and trading is generated in her account - then tax implication will be in her account and not yours, as per my understanding. So if her income comes in taxable limit, she will be required to pay tax otherwise not.
 
#6
If some one's total income including from stock market CM, F&O (SCG) near 2.5 Laks and at this point, if he stops trading in his PAN card and starts Trading in his wife name by transferring all funds to wife A/c.

Will this save tax ?
yes it will save tax..............because you and your wife both are two separate individuals.
 
#7
If you give a loan to your wife for trading and trading is generated in her account - then tax implication will be in her account and not yours, as per my understanding. So if her income comes in taxable limit, she will be required to pay tax otherwise not.
Provided you can prove and satisfy your ITO, that this a loan and not gift :D
 
#9
How can It be shown that my wife taken loan ?

Is it possible to show in ITR4
IMO, you should consult a CA for details and for the formalities. As at the time of assessment, particularly if by appearance before ITO, many things has been left at his discretion and many times it become difficult to prove a situation to his satisfaction, in the absence of supporting documents.

It will be better, if your wife takes a loan or gift (for capital purpose) from relatives like her father, her brother etc etc. by cheque/draft. And if your son/daughter are adult and are in job/earning, then they too can give loan/gift to their mother.

IMO, a lady should avoid taking loan from husband, father-in-law, mother-in-law and minor son/daughter. And a gift from these relatives is strictly NO NO.
 

ethan hunt

Well-Known Member
#10
any income earned on the moneis received from spouse is added back to givers income so even if Someone stops trading in his account & tranfers money to wifes account any gains made on that amount will be added back to Someones income for tax purposes. (clubbing provision).

if Someone shows the amount as loan to wife & receives interest then above clubbing provision will not apply. make a simple loan agreement mentioning interest % & take/give money by cheque.

AO/IT may still interpret either of the above 2 ways above to extract max tax ;).
 
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