FD limit for senior citizen

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This discussion addresses concerns about opening large Fixed Deposits (FDs) for senior citizens, particularly when the amount exceeds £10 lakh in a calendar year. The user is seeking to understand if such large deposits could attract queries from the Income Tax Department regarding the source of funds. The advice provided confirms that while a query is possible, it can be addressed by providing bank transfer details as proof of the funds originating from the son.

Ritesh

Ritesh (Querist)
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15 July 2024 Hello Sir,
I am Salaried person and coming in 30% tax slab.
My mom is pensioner and her income is not taxable . We are filling ITR for my MON from last 8 years.

I have Open FD (of very Good amount) on my mom name with her bank name. Because of 2 reason to get more interest rate for senior citizen and to save some tax on FD Interest (30 % vs 0 or 5% as income is not taxable).
But I have some where heard that if you open FD more than 10 L in 1 calendar year then income tax may send notice to you and ask source of Fund.
In My case will it cause any issue ? If such notice receive to my Mom can we tell this amount transfer from account holder's son ?

Dhirajlal Rambhia online

Dhirajlal Rambhia online

(Expert)
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15 July 2024 Yes, possibility of query being raised by ITD. You can reply to it by submitting bank transfer details.

Ritesh

Ritesh (Querist)
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15 July 2024 Thank you sir for your reply. So I got, we can mentioned below answer for reply
1. Money received from son for open FD to get more interest rate (0.5%)
2. attach bank transfer details.

Dhirajlal Rambhia online

Dhirajlal Rambhia online

(Expert)
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15 July 2024 1. Money gifted by son to mother is enough
2. Yes.

Message likes : 1 times

Dhirajlal Rambhia online

Dhirajlal Rambhia online

(Expert)
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25 August 2024 You are welcome.

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