serge (asst) (48 Points)
02 August 2013I am an NRI who occasionally sends funds from abroad to India. My parents invest the money in fixed deposits in their name. The interest earned on these investments is included in my tax return because the funds belong to me even though they are technically in the name of my parents. Is this a benami fixed deposit? Am I doing something illegal?
Beriwal
(nnnn)
(250 Points)
Replied 02 August 2013
No it is not benami provided the money transferred from abroad is thru legal channel and it is disclosed / shown in your Balance Sheet / Income Tax Return.
AVTAR SINGH
(Expert)
(1873 Points)
Replied 03 August 2013
The money should be treated as Gift by you to your parents. These gifts are not taxable in their hands and they can invest the money in their name. The income/interest received by them on such investment is taxable in their hands.
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