Wife and Husband can avail IT Deduction u/s. 80C and Pin Money Facility

The Income Tax law says that the limit of Rs. 1 Lacs of Income Tax Deduction u/s. 80C is for each account to per major Individual member & not for only Husband & wife taken together or Wife & Husband, both, It can avail separately by depositing Rs. 1 Lacs each in the PPF Account.

u/s 64(1) (iv) of the Income Tax Act-1961, any income arising from assets transferred to spouse without adequate consideration is taxable in the hands of the transferor and not in the hands of transferee. However, if asset is acquired by the spouse out of pin money (i.e., a reasonable allowance given to the wife by her husband for her dress and usual household expenses) then the income from such assets cannot be clubbed with the income of her husband. [R.B.N.J Naidu Vs CIT (1956) 29 ITR 194 (Nag) and R.Dalmia Vs. CIT (1982) 133 ITR 169 (Delhi).]

Resultantly, the income arising out of the reasonable fund of Pin Money accumulated & invested need not be clubbed with the income of your husband. The same could be treated as your income.

The amount need not transferred by depositing the amount in her account via cheque or DD. Even the amount given in cash and saved by the wife could be considered for the purpose.