I have attained NRI status and is planning to close my resident savings account in India. Before closing I want to transfer the funds from this account to my wife’s savings account (my wife is a resident Indian) through gift. My wife is a salaried professional and files her own tax return. My question is whether the interest earned from my transferred amount by my wife will be taxed in her name or it will be clubbed with my income. Presently my wife’s taxable income in India is more than mine.
Your Income is Taxable to you. Gift received by your Wife is non-taxable to her, however, Profit earned by the Gift amount is clubbed with your income. And, income generated by the Profit amount is taxable to your Wife.
It is taxable income for you. Refer my post “Income Tax on Gift in India – Rules and tips to save tax“.