NEW DELHI: Union Woman and Child development minister Maneka Gandhi has urged the Finance Ministry to make an amendment in Income Tax Act to let women pay taxes on income generated from gifts or assets they receive from husbands or father in laws.
At present, men are bound to pay these taxes even if they transfer income generating properties to wives or daughter in laws because of which many men are apprehensive about transferring properties to women.
"As a society, the onus of ensuring economic empowerment of our women lies on each of us. Following several requests from women, especially wives and daughters-in-law, I have urged the Finance Minister to examine and suitably amend Section 64 of the Income Tax Act," Gandhi tweeted late on Monday.
The Section 64 deals with clubbing of incomes and provides that if a husband gifts an asset to his wife and the asset results in some income to the wife, the income will be added to the taxable income of the husband.
The provision was originally formulated in 1960s under the assumption that wives and daughters-in-law would normally not have any independent taxable income, the minister argued adding that the e act was having an adverse effect as women at present were becoming financially independent.
"Today, with women leaving an indelible mark in every field, the Act seems to have an adverse effect," she said.The minister also pointed out that it has come to fore through several requests that husbands and fathers-in-law are apprehensive to transfer assets to women in their families because they fear that income accruing from the asset will ultimately become a burden on them.Tax experts, however, expressed doubts that such a move would convert to real asset ownership and financial freedom for women.
"The de-facto control may remain with the original owner and the arrangement may become merely a tax saving mechanism," said Archit Gupta, founder and CEO of ClearTax, a tax, finance and business compliance company.
"Losing revenue to meet social causes may be alright, but women may prefer moves such as reducing gender pay gap, or increasing overall exemption limit, exemption for day care and house help expenses, and more impactful measures".