Before doing so, you must now examine New Rules from the Income Tax Department.

As per latest news from the Income Tax Department –

Online shopping and digital payments have become increasingly popular, leading to increased taxation for those who transfer money or gifts to their wives monthly. This shift in purchasing habits and payment choices has resulted in a shift in payment choices, with many individuals transferring money to their wives’ bank accounts for home expenses.

The concern now is whether your wife will receive an Income Tax Notice if you transmit money every month. At the same time, another important question is whether you may get a tax break by treating this money as a gift.

Tax will be charged if you invest the money received from your husband

If you send money to your wife every month for household costs or as a gift on Diwali, Dhanteras, or any other special occasion, she is not subject to income tax.

The husband’s income will include both the amounts, and the wife will not be taxed on them. However, if the wife invests the money and earns income from it, the income gained on the invested capital will be taxable, and the wife’s income will be determined based on the investment income determined annually.

Tax exemption will not be available on money given as gift

According to the Income Tax Act, it is not illegal to provide money to your wife as a present in addition to your income. However, you will not receive any tax benefits from this.

If you send money to your wife as a present other than income, it will be considered income under the Income Tax Act. This will also be subject to taxation. Spouses fall within the category of relatives. There is no tax on such gift transactions in this case.

No need to file ITR

If the wife invests some of the money, she receives from her husband each month in Mutual Funds (MF) via SIP, she does not need to file an Income Tax Return (ITR File) on this money.

Not only that, but they will not be taxed on it. The interest from the investment of this money will be added to the husband’s taxable income.