Tax query

the father has a son who is above 18 yrs. the son does not have any income as he is studying. the father has a high income which falls in 30% tax bracket. if the father wants to open a fixed deposit can he gift it to his son or open a fd in his sons name so that the interest on fd will be taxable to his son. as his son doesnt have any income this int will fall in min tax limit. can tax be saved like this?
Replies (7)

yes! you can save tax in this way.

TDS is applicable on interest earned on FD...........

Yes he can gift fd to his son or open fd in his name...clubbing provision will not attracted in case of major son.

YES father can do so and he should submit to bank Form 15G for not deducting TDS since his son has no other income.

 

its very common in day 2 day life...so u can...n as mr neeraj said should submit 15 G...or u can open account in diffrent banks n make fds of around 50000 each...dats also an option 4 tax saving..

Amount received by you from your father is not taxable in your hands. If any subsequent investment is made by you out of such received amount that generates income, the same would be taxable in your hands, as you are major. However, I assume your fathers income does not have income earned from capital gains. Assuming further that if your father is having such high income because of any capital gains earned, then he needs to pay such tax accordingly first and then only he can gift the rest of amount in the way he wishes. Further agreed with Neeraj.

can tax be saved in the similar manner if husband gifts or buys the fd in wifes name?

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