Cross transfers between spouses in 2025 have specific tax implications:
Key Considerations:
- Direct cross transfers may be treated as tax avoidance
- Income from cross-transferred assets is clubbed with respective transferor’s income
- Indirect transfers through circular transactions are closely scrutinized
For example, if Spouse A transfers ₹5 lakhs to Spouse B, and Spouse B transfers ₹5 lakhs to Spouse A, any income from these amounts will be clubbed with the original owner’s income. The tax department may view this as tax avoidance if the main purpose is to reduce tax liability.
To avoid complications, maintain clear documentation of genuine transfers and their purposes.