Ravi, a regular income tax return filer transferred a sum of ₹ 5 lakhs from his bank account to his wife's bank account and thus made a fixed deposit of the same amount in wife's name earning interest @ 7.5% per annum. H

Tax Avoidance: Interest earned on fixed deposit is a taxable income under the head income from other sources of Income Tax Act. Making fixed deposit by Ravi in wife's name out of his own funds will be an act to avoid the tax liability on such income in his own hands by using the loophole of basic exemption threshold limit for mandatory filing of ITR.