The majority of India’s households are run by women who weave the entire family into one entity. If she is a housewife, her primary source of income is the money given to her by her husband each month to cover her home expenses.
Some ladies are known to preserve a substantial amount of weight over time. Many families were helped by this money during difficult times, especially in the latest Covid-19 crisis when her husband and other family members lost their jobs and sources of income, the woman stepped in to help.
When a wife earns income from the funds gifted by her husband or father, it is called a club of income as per the Income Tax Act. Club applies when the wife lacks the essential professional credentials to generate the money or if it is derived from her husband’s abilities.
The regulations of the club apply not only to cash and bank transfers, but also to transfers of other asset classes like stocks, investment trusts, and real estate if there is evidence of tax avoidance.
Pin money is the amount a woman saves from her husband’s monthly stipend to manage the house or meet her costs. It is a type of pocket money, but calling it pocket money would diminish a homemaker’s authority, therefore it is referred to as pin money.
The amount that can be charged as pin money is determined by the size of the husband’s salary, the overall family spending, the degree of contribution to household expenditures, and the justification of the woman’s savings, to avoid any misuse.
In other words, for anything to be termed pin money, it has to be a decent amount of money saved by the lady from her husband’s monthly allowance. Also, with such a large sum of money, she may invest without worrying about the return on her husband’s earnings.
It’s worth mentioning that pin money is comparable to “stree dhan,” which is the sum the bride has accumulated from the gifts and donations from family and well-wishers. A person who has possession of “Stree Dhan” is legally obligated to restore it to her whenever she needs it, with no restrictions or liens.
As a result, pin money is considered similar to Stree Dhan or salary, as well as any business she may have started herself.
Finally, unless the law disagrees, women will be able to save their household and personal allowances as pin-money savings instead of passing the tax burden on to their husbands in the future.