At present, under section 64 of the Income-Tax Act, 1961, any income arising from the gift made to the spouse is added to the income of the spouse making such a gift. Senior citizens are facing a lot of problems because of this provision. For example, if a man in his sixties wants to provide security to his wife, he would like to make a gift of certain money to her. The income of such gifted amount made by the husband to the wife will continue to be added to husband’s income. It is inappropriate that such a gift should entail clubbing of income.
It is suggested that for people above the age of 60, the provisions relating to clubbing of income and wealth should be done away with by suitably amending the income-tax law so that senior citizens can make gift to the spouse and secure the spouse’s old age. A similar amendment should be made in the draft direct taxes code.
Subhash Lakhotia, New Delhi
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