Ancestral investments query
This query is : Resolved
08 April 2013
My Grandfather had FD in HSBC Bank since last 19 years, now the amount is in big figure. My Grandfather had not shown the PAN card in the FD but the TDS is deducted on the regular basis. He also expired on 9th of June 2008 and we (His Family) wants to claim the FD amount, How to claim it and What is the tax effect on it ? The amount to be allocated to five persons which includes his son, daughter in law, and grandson. Please help me.
08 April 2013
And also how to show it in the books of account of all and in the Income Tax
14 July 2024
Claiming the Fixed Deposit (FD) amount after your grandfather's passing involves a few steps, particularly concerning tax implications and distribution among family members. Here’s a step-by-step guide to help you navigate this process:
### 1. Claiming the FD Amount
Since your grandfather passed away in 2008, the FD needs to be claimed by his legal heirs. Typically, the process involves the following:
- **Legal Heirs**: Identify all legal heirs who are entitled to claim the FD amount. In your case, it includes his son, daughter-in-law, and grandson.
- **Documentation**: Gather the necessary documents such as the FD certificate (if available), death certificate of your grandfather, legal heirship certificate (if required by the bank), identity proofs of all legal heirs, and any other document specified by the bank.
- **Procedure**: Contact the HSBC Bank where the FD is held. Inform them about your grandfather’s demise and provide the required documents. They will guide you through their specific procedure for transferring the FD amount to the legal heirs.
### 2. Tax Implications
- **TDS Deduction**: Even though your grandfather did not provide his PAN card, TDS (Tax Deducted at Source) would have been deducted from the interest earned on the FD. The rate of TDS depends on whether PAN was provided and the applicable tax rates.
- **Tax Liability of Legal Heirs**: The FD interest earned until the date of your grandfather's death is considered his income and would be taxed in his hands for that financial year. Any interest accrued after his death would be considered income of the legal heirs in proportion to their share.
- **Income Tax Return**: Each legal heir who receives a share of the FD amount should declare their respective income from the FD interest in their income tax return for the relevant assessment year.
### 3. Distribution Among Legal Heirs
- **Distribution**: The FD amount will be distributed among the legal heirs as per the terms of your grandfather’s will, or if there is no will, as per the laws of inheritance applicable to him (such as Hindu Succession Act, if applicable).
- **Tax Treatment**: Each legal heir will be taxed on their share of the FD interest income. They should maintain records of the income received and pay tax accordingly.
### 4. Showing in Books of Accounts
- **Individual Accounts**: Each legal heir should record their share of the FD amount received in their personal books of accounts.
- **Income Tax**: Ensure that the income from the FD interest is correctly accounted for in each legal heir's income tax return.
### Steps to Take:
- **Contact HSBC Bank**: Initiate the process of claiming the FD amount by contacting the bank and providing the necessary documents.
- **Consult Tax Advisor**: Given the complexity of tax implications, especially with respect to income tax on interest earned and TDS, it’s advisable to consult a tax advisor or chartered accountant. They can provide personalized guidance based on your specific situation, ensure compliance with tax laws, and help you with the proper reporting of income.
- **Legal Assistance**: If needed, seek legal advice to ensure that the distribution of the FD amount among legal heirs is done correctly and as per applicable laws.
By following these steps and seeking professional advice where necessary, you can effectively claim the FD amount and manage the tax implications in accordance with Indian tax laws.
### 1. Claiming the FD Amount
Since your grandfather passed away in 2008, the FD needs to be claimed by his legal heirs. Typically, the process involves the following:
- **Legal Heirs**: Identify all legal heirs who are entitled to claim the FD amount. In your case, it includes his son, daughter-in-law, and grandson.
- **Documentation**: Gather the necessary documents such as the FD certificate (if available), death certificate of your grandfather, legal heirship certificate (if required by the bank), identity proofs of all legal heirs, and any other document specified by the bank.
- **Procedure**: Contact the HSBC Bank where the FD is held. Inform them about your grandfather’s demise and provide the required documents. They will guide you through their specific procedure for transferring the FD amount to the legal heirs.
### 2. Tax Implications
- **TDS Deduction**: Even though your grandfather did not provide his PAN card, TDS (Tax Deducted at Source) would have been deducted from the interest earned on the FD. The rate of TDS depends on whether PAN was provided and the applicable tax rates.
- **Tax Liability of Legal Heirs**: The FD interest earned until the date of your grandfather's death is considered his income and would be taxed in his hands for that financial year. Any interest accrued after his death would be considered income of the legal heirs in proportion to their share.
- **Income Tax Return**: Each legal heir who receives a share of the FD amount should declare their respective income from the FD interest in their income tax return for the relevant assessment year.
### 3. Distribution Among Legal Heirs
- **Distribution**: The FD amount will be distributed among the legal heirs as per the terms of your grandfather’s will, or if there is no will, as per the laws of inheritance applicable to him (such as Hindu Succession Act, if applicable).
- **Tax Treatment**: Each legal heir will be taxed on their share of the FD interest income. They should maintain records of the income received and pay tax accordingly.
### 4. Showing in Books of Accounts
- **Individual Accounts**: Each legal heir should record their share of the FD amount received in their personal books of accounts.
- **Income Tax**: Ensure that the income from the FD interest is correctly accounted for in each legal heir's income tax return.
### Steps to Take:
- **Contact HSBC Bank**: Initiate the process of claiming the FD amount by contacting the bank and providing the necessary documents.
- **Consult Tax Advisor**: Given the complexity of tax implications, especially with respect to income tax on interest earned and TDS, it’s advisable to consult a tax advisor or chartered accountant. They can provide personalized guidance based on your specific situation, ensure compliance with tax laws, and help you with the proper reporting of income.
- **Legal Assistance**: If needed, seek legal advice to ensure that the distribution of the FD amount among legal heirs is done correctly and as per applicable laws.
By following these steps and seeking professional advice where necessary, you can effectively claim the FD amount and manage the tax implications in accordance with Indian tax laws.
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