Plz help on the following issue:
As per the clubing provisions, any income of minor is required to be clubbed in the hands of either of has parent.
There is a client who is having a big business.
there was some disturbance in his life and his wife along with his 2 year child has separated.
thereafter the brother of the wife has made an Fixed deposit of Rs 1 Crore in the name of the minor child, (mother is not having income)
Every year our client is bound to pay Rs 3 lac due to that FD (aas per clubbing provision) interest on FD @ 10% taxable in the hands of father.
mother is not intented to make any agreement to live apart.
Whether there is any solution is available to the father to prevant the tax outflow of Rs 3 lacs.
CAclubindia
