On gift and its tax, if any [India specific-rules]

Question

All the following questions are India-specific: -

Q1) Is it legal to gift a large portion of retirement proceeds to wife?

Q2) If legal, will only the accrued sum of money of husband generated from reduced amount be taxed?

Q3) If the gifted amount does not earn taxable income, will the wife has to pay any tax?

Q4) Will the husband have to pay any gift tax for gifting to wife?

Answer 1

If you gift a large protion of money to your money, then your wife have to pay gift tax on that money after considering some specific exemption money and if she crossing the exemption income (i.e 1.85 L for women from A.Y. 2009-10)

If your wife not earning taxable income out of gifted amount then she need not to file I.T. Return.

Answer 2

Read about wealth and gift tax in India http://mytaxes.in/index.php?topic=19.0