Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
General »
Open DEMAT Account in 24 hrs
 Moonlighting for Additional Income? Know Its Tax Implications
 Have you claimed education cess? Be prepared to pay tax as per the new rules
 Reserve Bank - Integrated Ombudsman Scheme, 2021 (RBIOS, 2021)
 How is tax computed for selling a house?
 How much tax do you pay on equity investments?
 Fuel taxes: Centre s gains striking since FY16
 Tax rules for NRIs on sale of assets located in India
 ITR filing: Know tax rules that apply to freelancers in India
 Delhi Real Estate News: NDMC extends last date for property tax payment with amnesty scheme
 Citizens must file THESE ITR related forms before due date Income Tax Returns
 If a senior citizen makes FD in name of his son, who will pay tax on interest?
 Your queries (Income Tax): Use ITR Form 2 to file tax on capital gains on sale of property
  Why you must verify your income tax returns
 Relief for top management including foreign partners, directors in tax matters
 Ready for futures and options? This is how you will be taxed

If a senior citizen makes FD in name of his son, who will pay tax on interest?
February, 14th 2022

The transaction can either be treated as gift or a loan. In case you give this money as gift to him, there will not be any tax implications for you as gift received from specified relatives including parent are tax free in the hands of the recipient. The clubbing provisions will also not apply as your son is adult. 

Alternatively, you can advance this money as loan to your son which then can be invested by him in FD and which shall be taxable in his hand. The loan can be interest free or interest bearing loan. Please note that in case you give an interest free loan and are already paying any interest on the money borrowed, advancing of interest free loan will not work as the assessing office may disallow your claim for proportionate interest paid relatable to the interest free loan. 

Please note that just by gifting the money to your son, which is exempt in his hand, you will lose your right over your money.

 

In case you do not intend to treat this transaction as gift or a loan, the income tax officer may club the interest income applying the provisions of Section 60 which covers the cases of transfer of income without transfer of the underlying asset.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2022 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting