Gift tax
Mrunmai Deshpande
(Querist) 03 February 2016
This query is : Resolved
Sir – I am in 20% tax bracket. My son is also employed but his current annual income is less than 2.5 lacs. I have a joint bank SB A/c with my son where my son is the 1st holder in the A/c. I made an FD on our joint name with my son as the 1st holder. I have transferred the amount from my individual A/c. The interest from that FD will be transferred to the above mentioned JT A/c. Can the above mentioned transferred amount be shown as gift given to my son? Who has the tax liability for the interest earned on this FD? Please advise.
Anirudh
(Expert) 03 February 2016
When the FD is in your Son's name, interest from it will be included in the income of your son. He is liable to pay tax in case his total income exceeds (after including this interest) the exemption limit.
Therefore, the question of your trying to show as gift from you to your son does not at all arise.
I appreciate your anxiety to save tax. But, please take proper prior-advice while doing any such tax planning, rather than at the end - where probably your idea of tax planning may or may not work.
Rajendra K Goyal
(Expert) 03 February 2016
The interest is supposed to be earned by first holder of the FD.
Gift from father to son is free from gift tax.
R K JAIN
(Expert) 03 February 2016
It is better to gift the money to son and later on your son make the FD.
Dr J C Vashista
(Expert) 05 February 2016
Well advised, no room left to add.
