How to reduce tax liability by lending money?

My wife doesn’t have any source of income.What is the legal procedure of lending money to her so that the income earned by investing that money in shares is not added to my taxable income and taxed to my wife?

How to reduce tax liability by lending money?
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2 Replies to “How to reduce tax liability by lending money?”

  1. Not possible if you are married ‘the normal way’. For tax-purposes you will be seen as one. There are ways to use some loopholes, but too hard to explain right here. But if you really need a legal way to do so, mail or IM me.

  2. First the money has to be accounted for in your statements. After that you may gift the money to your wife. There is no tax for gifts given by husband to wife. So she will not have to pay any tax on the amount. Next she will have to invest the money in her name. Whatever income that comes out of that investment will be taxed as per income tax rules applicable for women. This way you will at least get the initial exemption available to all women. If the income is below taxable limit then there is nothing to worry. Either way it is advisable that your wife get a PAN card and file income tax returns as individual.

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