TomorrowMakers

What is Pin Money, and how does a woman save taxes on the same

There are an estimated 25 crore families in India, with the vast majority being governed by diverse and dexterous women who weave the entire family into a single entity. Women are significantly responsible for the common thread of effective financial management that runs across all the homes. If she is a stay-at-home mom, the money her husband sends her every month to cover family expenses is her primary source of income. The fact that very few women do not save from their monthly stipend demonstrates the superior financial ability of women in managing money.

The money saved by the wife from her husband's monthly salary is known as pin money. Such pin money can be invested without her husband's concern about the returns being added to his earnings. 

What does the income have to say about housewife earnings?

The income tax regulations allow for income clubbing when the wife receives an income from cash provided by her husband or father in law because it is considered a non-application of her competence. If she and her husband are partners in a partnership and she receives a salary or profit without exercising her talent, the same requirements apply. When a woman lacks the requisite professional skills to earn money, she is forced to rely on her husband's abilities.

Also Read: Best Ways To Improve Financial Security For Women

Pin money and correlation provisions

To comprehend the correlation, one must first comprehend the relationship between pin money and clubbing restrictions. Pin money is an exception to clubbing restrictions, implying that any profit made by investing pin money would not be taxable under clubbing regulations, on the basis that this money was not given to her as a gift but was saved through her labour. The Income-tax doe, an appeals body, has backed up this point of view.

What is the maximum amount of pin money that can be claimed?

The amount of the husband's salary, the overall home expenditure, the amount of the contribution made for household costs, the reason for the house lady's large savings, and so on are all factors to examine. There is no maximum limit, but it should be a reasonable amount based on the above factors.

As a result, pin money is treated as if it were a salary or the earnings from her own business.

StreeDhan-like pin money

Pin Money is similar to "StreeDhan," which is money collected by the bride through gifts and contributions from relatives and friends.

According to the Supreme Court, "a Hindu married woman is the absolute owner of her StreeDhan property and can deal with it in any way she wishes."

A distinguishing aspect of the Income Tax regulations is that a gift from the husband is clubbed; however, a gift from the parents or siblings is not.

Conclusion

To summarise, women can freely save their savings from domestic costs or personal allowance as pin money and avoid shifting the tax burden to their spouse until lawmakers alter their thoughts in the future.