Fd in name of blood relative
This query is : Resolved
01 September 2018
I am currently one of three working members in a family of four people. My Mother, Father are also working and my younger sister is currently in college. In order to save certain tax liability and to make financial investments, we decided to save money in form of FD in my sisters name.
I wanted to know if that would attract any tax liability? To elaborate further, I have the following specific questions
1. When we transfer money to her account, can that be counted as a Gift ? If not, would that attract any tax liability ?
2. If it does get counted as a Gift, would the income from FD be counted as her income or would that be clubbed with the income of the people who are gifting her that money ?
Our objective was to create FD Interest that comes under less income tax bracket. All three of us (My mother, father and myself) earn more than 10LPA and hence come under 30% tax liability bracket. My sister is older than 18 and hence an adult. I am also clear that at the very minimum, the income generated from the FD would be her income and we would need to pay Tax on that, which we are diligently doing
I wanted to know if that would attract any tax liability? To elaborate further, I have the following specific questions
1. When we transfer money to her account, can that be counted as a Gift ? If not, would that attract any tax liability ?
2. If it does get counted as a Gift, would the income from FD be counted as her income or would that be clubbed with the income of the people who are gifting her that money ?
Our objective was to create FD Interest that comes under less income tax bracket. All three of us (My mother, father and myself) earn more than 10LPA and hence come under 30% tax liability bracket. My sister is older than 18 and hence an adult. I am also clear that at the very minimum, the income generated from the FD would be her income and we would need to pay Tax on that, which we are diligently doing
01 September 2018
Clubbing of income clause may apply since the investment money is not a gift to your sister per se but only an arrangement to avoid paying taxes by the rest of the family.
01 September 2018
1. Account transfer by itself will need construe as gift
01 September 2018
2. Will be clubbed with the income of people who are gifting her
03 November 2021
No tax liability over gift from relatives like brother/s or parents.
No clubbing provision in case your sister is 18+ age, The interest will be assessed in her IT account.
No clubbing provision in case your sister is 18+ age, The interest will be assessed in her IT account.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Unregistered suppliers utility
- Difference between Date of Payment and Date of Deduction?
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- URGENT-Eligible leaves being shown as 24 days for 3 years Articleship instead of 156 days in 108
- Cash balance limit and property purchases limit
- Can we choose not to report losses in ITR3 if they cannot be carried forward?
- ITR 4 and Bank transactions
- Need Professional Opinion - AY 2012-13 Old Demand & AY 2026-27 Refund Adjustment
- The TDS balance for March 26 shows a mismatch between the books and the portal; what should be done
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
