Tax
Abhishek Gupta
(Querist) 04 May 2015
This query is : Resolved
My Grandfather has a joint account with my father. The first name is of my grandfather and second name is of my father. Grandfather has made 2-3 Fixed Deposit(FDs) of Rs 2 lakhs. On FDs also names of both of them are written.
Now my grandfather has expired.
Just wanted to know the Tax liability of this amount on my father. Does he need to pay Income Tax on the entire amount ie. Rs 2 lakh + interest on the FDs ? Or only the Interest earned will be taxable.
Regards,
Abhishek Gupta
R.K Nanda
(Expert) 04 May 2015
consult tax lawyer.
Anirudh
(Expert) 04 May 2015
Only the interest earned is liable to tax.
The principal amount of the FD (Rs. 2 lakhs in this case) was already a tax paid income and therefore will not attract tax.
Rajendra K Goyal
(Expert) 04 May 2015
Interest would be taxable in the hands of the first named person of the FD.
Dr J C Vashista
(Expert) 04 May 2015
The tax is levied on the amount earning interest i.e., income and not the account holder (person).
Vineet
(Expert) 05 May 2015
The is liable to be paid only on interest and not principal. Now if the FDs were made from funds of your grandfather and reported in his IT record and your father was merely a second name lender, the income will continue to be assessed in the name of Grandfather with your father as representative assesse. If the amount is small, better to include the same in income of your father to avoid hassles of filing two returns.
