08 July 2020
Mr. K, a qualified professional, from Surat, wishes to subscribe Rs. 10.00 lakhs to the Vay Vandan Yojana run by LIC, in the name of his mother, aged 70. The pension derived from the scheme will be credited to the bank account held in the name of mother and the money will be at her disposal for spending as per her wish & will. Will this attract the clubbing provisions? This does not involve "transfer of income without transfer of asset" because the money will actually flow to LIC. The money will come back to the subscriber in the event of the mother's demise or at the expiry of the Policy term.
Will there be a difference if the bank account is opened in the joint names of the mother (as the primary account holder) and the son?
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