One of my friend having salary income (above exempt limit), if he gives this income to his parents (retired - no income) and if they put them under fixed deposit in bank and provide form 15 H for non deduction of TDS on interest.
is it valid practice?
Whether interest income earned upon FD will be clubbed to my friend's income or not?
Please advise.
Not valid.........form - 15 H and G for certifact that allow lower diduction of TDS..!
IN MY OPINION UR FRIEND CAN TRANSFER HIS INCOME TO HIS PARENTS AS GIFT WHICH IS NOT TAXABLE SINCE IT IS FROM RELATIVE U/S 56.THERE IS NO CLUBBING PROVISION APPLICABLE FOR THE SAME.SINCE CLUBBING PROVISION IS APPLICABLE IN CASE OF TRANSFER TO SPOUSE,CHILDREN AND SONS WIFE AND NOT PARENTS.THEREFORE UR FRIENDS PARENTS CAN INVEST IN F.D AND SINCE INTEREST ON F.D WHICH IS ONLY INCOME FOR THEM IS BELOW EXEMTION LIMIT CAN SUBMIT FORM 15 H AND NO T.D.S WILL BE DEDUCTED
| Originally posted by : CA BHUMIT SHAH | ||
 |
IN MY OPINION UR FRIEND CAN TRANSFER HIS INCOME TO HIS PARENTS AS GIFT WHICH IS NOT TAXABLE SINCE IT IS FROM RELATIVE U/S 56.THERE IS NO CLUBBING PROVISION APPLICABLE FOR THE SAME.SINCE CLUBBING PROVISION IS APPLICABLE IN CASE OF TRANSFER TO SPOUSE,CHILDREN AND SONS WIFE AND NOT PARENTS.THEREFORE UR FRIENDS PARENTS CAN INVEST IN F.D AND SINCE INTEREST ON F.D WHICH IS ONLY INCOME FOR THEM IS BELOW EXEMTION LIMIT CAN SUBMIT FORM 15 H AND NO T.D.S WILL BE DEDUCTED |
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