Income tax filing is one of the most important thing provisioned strictly for all Indian citizen who falls under the eligible tax slabs. However, there are also many provisions has been proposed which are beneficiary for the tax payer. Clubbing provision is one of them which combines family investments together while calculating tax. Duringonline income tax return filing, you must mention all the investment done under your family members who does not fall under income tax slab.
Family members included spouse, minor children and parents for whom you can buy investments or policies to which are not liable to be taxed and need not to be mention during income tax filing. However, according to Income Tax Act, section 64, clubbing provision was directed which states that any asset purchased under the name immediate family member who are not working or non-tax payers must be added to the income of the person making the investments. With this provision being affective, during online income tax return filing, all the family investments will be combined with the investment payer’s income and will be taxed accordingly. The investment includes shares, properties, lands, savings, insurance policies, shares and mutual funds etc.
Although, these incomes are combined but income generated from them are not liable to taxed or to be mentioned during income tax filing. There are also some other type of investments which are tax-free and can be done in the children’s name such as SukanyaSamridhiYojana or KanyaDhanYojana. Even buying PPF or tax-free bonds for family members are a good idea as though these investments get clubbed but there is no tax implication on them.
The clubbing provision combines all the family investments under the main tax payer’s name and requires to mention them during online income tax return filing but not all the investments are tax implicated.
Also Read : Choose the Correct Category of ITR Form for You Tax Filing
Although, these incomes are combined but income generated from them are not liable to taxed or to be mentioned during income tax filing. There are also some other type of investments which are tax-free and can be done in the children’s name such as SukanyaSamridhiYojana or KanyaDhanYojana. Even buying PPF or tax-free bonds for family members are a good idea as though these investments get clubbed but there is no tax implication on them.
The clubbing provision combines all the family investments under the main tax payer’s name and requires to mention them during online income tax return filing but not all the investments are tax implicated.
Also Read : Choose the Correct Category of ITR Form for You Tax Filing
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