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Whenever you send money to your wife every month under UPI or cash for household expenditure, you should be aware of certain income tax rules which may lead to sending you a notice for tax. Section 269SS and 269T of the Income Tax Act states that transactions in cash exceeding an amount will be treated as forming part of taxable income.
Income Tax rules to obtain approval in cash transfer
Generally, money provided by a husband to his wife is not taxed. However, if your wife invests the amount received in Fixed Deposits (FDs), property, or the stock market, income from such investments could be included in your tax return.
Avoid transferring more than Rs 20,000 in cash.
For amounts exceeding Rs 20,000, use RTGS, NEFT, or cheques to avoid scrutiny.
If the amount is given as a gift, no tax notice will be issued.
Understanding Sections 269SS & 269T of the Income Tax Act
Cash transactions have been regulated, and black money has been curbed through these sections.
Section 269SS: Prohibits accepting cash advances, loans, or deposits above Rs 20,000.
Section 269T: Requires repayment of loans or deposits above Rs 20,000 through banking channels.
Try to be compliant with these regulations while dealing with the finances of your spouse to avoid tax-related issues.
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