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    • Question

      Mr. A transfers fixed deposit of ₹5 lakh to his wife

      without consideration. Interest of ₹50,000 is earned in her name. How will it be taxed?
      A In hands of wife Correct Answer Incorrect Answer
      B Exempt income Correct Answer Incorrect Answer
      C In hands of Mr. A Correct Answer Incorrect Answer
      D Clubbed in minor child’s income Correct Answer Incorrect Answer

      Solution

      Under Section 64(1), income from assets transferred to spouse without consideration is clubbed with transferor’s income.

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