Taxability
This query is : Resolved
26 March 2015
IF A SON(MAJOR) MAKE A FIXED DEPOSIT IN THE NAME OF HIS MOTHER AND HIS OWN NAME AS SECOND HOLDER,THE AMT CONTRIBUTED IS BY SON FROM IN HIS OWN INCOME, THE PANCARD NO GIVEN IS OF MOTHER AS IT IS A FIRST HOLDER.NOW THE INTEREST EARNED ON THAT FIXED DEPOSIT IS CREDITED TO THE SON SAVING ACCOUNT.SO I WANT TO KNOW IN WHOSE HAND THE INTEREST INCOME WILL BE TAXABLE FOR THAT FINANCIAL YEAR,IF IT IS IN HAND OF MOTHER THAN WHEATHER IT CAN BE CLUBBED IN SON INCOME?
26 March 2015
if the amount was deposited by son from his earnings then its taxable in his itr
26 March 2015
BUT IF SUPPOSED TDS IS DEDUCTED FROM THAT INT AMT BY BANK, IT WILL BE SHOWN IN THE FORM 26AS OF MOTHER AND NOT IN SON 26AS,AS THE PAN NO. GIVEN IS OF MOTHER. HOW CAN A SON CLAIM THAT TDS?
26 March 2015
BUT IF SUPPOSED TDS IS DEDUCTED FROM THAT INT AMT BY BANK, IT WILL BE SHOWN IN THE FORM 26AS OF MOTHER AND NOT IN SON 26AS,AS THE PAN NO. GIVEN IS OF MOTHER. HOW CAN A SON CLAIM THAT TDS?
26 July 2025
Great question! Here’s how it works in this scenario:
---
### Situation Recap:
* **Son (major)** deposits his own money into an FD in the **mother's name (first holder) and his own name (second holder)**.
* **Interest credited to son's savings account.**
* PAN given to bank is **mother’s PAN (since she is first holder)**.
* TDS on interest is deducted by bank and reflected in **mother’s Form 26AS**, not son’s.
---
### Taxability of Interest Income:
* Since the **son contributed the money** from his income, **interest income is taxable in the son’s hands** (as per Income Tax Clubbing provisions and CBDT circulars).
* Even if the FD is in mother’s name, the source of funds decides the taxability.
* So, son must report the interest income in **his Income Tax Return (ITR)**.
---
### Claiming TDS Credit (Since TDS is in mother’s 26AS):
* TDS is **linked to the PAN provided to the bank**, which is mother’s PAN.
* So the **TDS credit will reflect in mother’s Form 26AS**, not son’s.
* This creates a mismatch: son must declare the income but TDS credit is with mother.
---
### How to resolve TDS credit mismatch:
**Option 1: File a refund claim for mother**
* Mother can file her ITR declaring the interest income and TDS deducted.
* If she does not have this income (since it’s son’s income), the tax liability will be zero, and she can claim refund of TDS.
**Option 2: Request bank to correct PAN and reissue TDS certificate**
* Son can ask bank to update PAN to his (since he is the contributor) so TDS is deducted against son’s PAN and reflected in son’s Form 26AS.
**Option 3: Submit a declaration to the bank**
* Submit a declaration (Form 15G/15H if applicable) in son’s name to avoid TDS, provided son’s total income is below taxable limit.
---
### Summary
| Aspect | Who | Notes |
| ---------------------- | ------------------------- | ------------------------------------------------------------------ |
| Taxability of Interest | Son | Interest taxable in son’s hands as he contributed money |
| PAN given to bank | Mother | TDS deducted under mother’s PAN, reflected in mother’s 26AS |
| TDS credit mismatch | Son cannot claim directly | Mother must file return & claim refund or bank PAN to be corrected |
---
If you want, I can help draft a letter/email to the bank for PAN correction or help with the refund procedure. Need help?
---
### Situation Recap:
* **Son (major)** deposits his own money into an FD in the **mother's name (first holder) and his own name (second holder)**.
* **Interest credited to son's savings account.**
* PAN given to bank is **mother’s PAN (since she is first holder)**.
* TDS on interest is deducted by bank and reflected in **mother’s Form 26AS**, not son’s.
---
### Taxability of Interest Income:
* Since the **son contributed the money** from his income, **interest income is taxable in the son’s hands** (as per Income Tax Clubbing provisions and CBDT circulars).
* Even if the FD is in mother’s name, the source of funds decides the taxability.
* So, son must report the interest income in **his Income Tax Return (ITR)**.
---
### Claiming TDS Credit (Since TDS is in mother’s 26AS):
* TDS is **linked to the PAN provided to the bank**, which is mother’s PAN.
* So the **TDS credit will reflect in mother’s Form 26AS**, not son’s.
* This creates a mismatch: son must declare the income but TDS credit is with mother.
---
### How to resolve TDS credit mismatch:
**Option 1: File a refund claim for mother**
* Mother can file her ITR declaring the interest income and TDS deducted.
* If she does not have this income (since it’s son’s income), the tax liability will be zero, and she can claim refund of TDS.
**Option 2: Request bank to correct PAN and reissue TDS certificate**
* Son can ask bank to update PAN to his (since he is the contributor) so TDS is deducted against son’s PAN and reflected in son’s Form 26AS.
**Option 3: Submit a declaration to the bank**
* Submit a declaration (Form 15G/15H if applicable) in son’s name to avoid TDS, provided son’s total income is below taxable limit.
---
### Summary
| Aspect | Who | Notes |
| ---------------------- | ------------------------- | ------------------------------------------------------------------ |
| Taxability of Interest | Son | Interest taxable in son’s hands as he contributed money |
| PAN given to bank | Mother | TDS deducted under mother’s PAN, reflected in mother’s 26AS |
| TDS credit mismatch | Son cannot claim directly | Mother must file return & claim refund or bank PAN to be corrected |
---
If you want, I can help draft a letter/email to the bank for PAN correction or help with the refund procedure. Need help?
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