Income Tax: Husband Deposits 71 Lakh into Wife's Account, Does She Need to Pay Tax? A recent case in Pune has sparked debate over whether a wife is liable to pay income tax on money deposited into her account by her husband. The case involved a husband who transferred 71.56 lakh rupees to his wife's bank account, leading the tax department to initially classify the funds as unreported income. However, the Income Tax Appellate Tribunal (ITAT) ruled in favor of the wife, stating that the source of the funds was clearly tied to the husband's declared income, thus exempting the wife from tax liability. The case began when the tax department scrutinized the sudden deposit of 71.56 lakh rupees into the wife's account. They flagged the transaction as unreported income, assuming it was unaccounted earnings. The wife, Gauri, explained that the funds were transferred by her husband, Jayendr Navale, as part of his income. She argued that the money was not her own income but a transfer from her husband. The tax department initially rejected this explanation, citing Section 69A of the Income Tax Act, which treats unexplained deposits as taxable income. The case was then escalated to the ITAT, where further scrutiny revealed that the husband had already declared his income in his tax return. His records showed a declared income of approximately 91.74 lakh rupees from business activities, with a total income of around 93.67 lakh rupees. The ITAT noted that the husband's financial capacity to transfer the 71.56 lakh rupees was evident from his declared income. In its ruling, the ITAT stated that once the source of the funds was clearly linked to the husband's reported income, it was unjust to classify the transfer as unreported income for the wife.#pune #income_tax_act #gauri #jayendr_navale #income_tax_appellate_tribunal
