Tax Implications of Gifting Money to Spouse

Gifting money to your spouse can have tax implications.

While the gift itself is tax-free, any income generated from investing that money may be taxed in your hands due to clubbing provisions.

The Income-tax Act provides exemptions for gifts from relatives, inheritance, and wedding gifts.

However, if the gifted money is invested and generates income, it may be added to your taxable income.

There are exceptions, such as income earned by your spouse through their own professional expertise, which is not subject to clubbing.