CA Sandeep Kanoi

CA Sandeep KanoiSaving Tax through Family! Surprised! Yes, we can save tax through our family members i.e. Parents, Major Children’s and Wife. To Save Tax through Family members we needs to invest in way that our tax burden shifts to our family members and we can take the benefit of Income Tax Slabs.  Saving tax Through means not only saving in tax but also means Post Tax  higher returns on your Investment.

Here is how we can save tax through our family members.

Through Parents

You can save tax through our own parents as well as through our Parent in-laws. To achieve this goal you needs to give away a portion of your funds, either as a gift or a loan, to your parents as well as your parents in law so that in years to follow your income tax burden becomes lighter as the income on funds transferred by you to them which would bring in income would be taxed in their hands.

Assuming that both the parents are senior citizens. Here’s how you go about it. Income tax deductions allow senior citizens a tax-free income of Rs 3 lakh. To exhaust this limit, say you gift Rs 28 lakh to each parent in cash. Of this, both can individually put Rs 15 lakh in a senior citizens savings scheme that earns a return of nine per cent and pays interest every quarter. Each will get yearly interest of nearly Rs 1.4 lakh. If they invest the remaining Rs 13 lakh each in the State Bank of India’s (SBI) fixed deposit (FD) of eight-years (at an interest rate of 7.5 per cent) that pays interest each quarter, it will fetch them an income of nearly Rs 1 lakh annually. That means both parents have earned Rs 2.8 lakh from the senior citizen saving scheme and another Rs 2 lakh from SBI’s five-year deposits each year. A total savings of Rs 4.8 lakh – the tax-free limit (Rs 2.40 lakh) that each parent enjoys. So, they don’t even need to file tax returns.

Same planning can be done for parents in laws.

Through Major Children

All your adult children are as solid as a rock to help you save your income tax. After October 1, 1998, the provisions relating to gift-tax have ceased to exist. Now you are free to gift away your money to your children without attracting gift tax. Investment made by Major Children out of the gift received by you will be  taxed in the hands of your children.  If for any reason you are inclined to make gifts to your major children, then you may give interest-free loans to your adult children so as to legally reduce your taxable income.

It is lawful to grant interest-free loans to adult children from your own funds.

Through Your wife

Married taxpayers can make a substantial saving of income tax by setting up two separate independent income tax files, one each for the husband and the wife.  If your wife is already filing Income Tax Return then she may continue filing the return with hew new surname and address or with her old surname and address.

Thus, as a result of marriage one should plan a separate income-tax file of the wife. However, care should be taken to ensure that no direct gift or transfer from husband is made to the wife as clubbing provision may get attracted.

(Republished with Amendments)

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109 responses to “Tax Planning- Save tax through your family”

  1. Venkatesh says:

    What for this comment section ?
    People keep on asking questions only
    None are answered. Close this comment box

  2. dsou says:

    Sir, I am a central govt.employee during 2015-16 my gross salary was 803694/- less allowances 19200/- Balance 784494 agreegate 2500/- i.e. Rs.781994/-deductions
    LIC 17406/-
    PLI 1716/-
    GSLIS 720/-
    GPF 2,88000/-
    ———————
    Total : 307842/-
    Section 80 CCC: 1,50000/-
    ———————————-
    Total income :631990/-
    ———————————-
    Tax : 51398/-
    Edu cess : 1542/-
    ———————————-
    Total tax paid : 52940/-
    during 2015-16 FY 2016-17
    ———————————-
    How can I save the Tax of Rs.52940/- or over for the FY year 2017-18 please guide me accordingly.
    Also, My husband is retired and his age is 61, two childrens are studying Engg.
    I am saving in Mutual Fund i.e. Rs.20,000/- can get income tax exemption.. If i gift 100000/- to my son as gift can get exemption????
    Please guide accordingly
    Thank you

  3. r c patel says:

    my father get compensation money, and diveded in family member as sons and daughters. then what are the procedure for income tax

  4. Jagdish says:

    Sir,

    I have sold my flat which was on a joined name of me and my father. Now my brother has taken a new flat. We wanted to give our sold flat money to him for buying a new flat. Is our name should come in agreement of new flat? Kindly advise us.

  5. hr says:

    can a brother give gift in cash to another brother through funds generated on closure of his proprietorship firm . if Yes, then there is any limit for giving gift in amount term. whether there is any tax implication on donor or donee in case of such gift????

  6. babu says:

    if i deposite 9 lakhs as fixed deposite in bank i have to pay income tax

  7. bharti says:

    sir,
    first thank to read my Q? And Ans of this.

    Q…Sir i have equity trading A/c i sold 500 Shares of XYZ company of my brother and after some days i bought it share of xyz company and back to brother.
    1. What is tax treatment in my books STCG / STCL
    2. What is tax treatment in my brothers books
    3 Can my brother lend me xyz company shares with nominal interest on 8% pa on the basis of no of day used stock (Value of XYZ company )
    4 securities Lending and borrowing between family members allow or not
    5 we have agreement between brothers where securities Lending and borrowing between family with the guarantee of my mother (can play role between brother as guarantee (we can say Counter Party defualt any of them) is it valid or not
    please reply soon

    bharti

  8. SURAJ PANDEY says:

    hi sir,
    please help me income tax file return who to save money pealse gelp me

  9. shashikant mehya says:

    I have invested in equity funds in my grand-daughter name under mother’s guardianship. If now I invest in tax-saving funds in name of grand-daughter does the mother get advantage of 80C?

  10. Ajay says:

    I got a cash gift worth 5 lacs from my mother in law. Do I need to declare it in ITR. If yes, where ? I am a salaried person and fill ITR1.

  11. prashant says:

    sir,
    my father have sell my plot in 2 cr ,this plot situated in my own agricultural land under city limit , total amount is divided in 4 part , i have revived rs 0.5 cr , please help me for tax saving

  12. Madhusudhan says:

    Hi Sir,

    I’ve earned 25K interest from 3 different savings bank accounts. Also earned Rs.4484/- from one FD got matured in Feb 2015(Fiscal 2014-15). Also I have, 3 more FD’s which get matured in Aug 2015 but 10% TDS of Rs.2262/- for these 3 FD’s was deducted by bank for fiscal 2014-15.

    Pls. guide me how to file retunrs and pay tax. How to input the details in e-filing regarding 3 FD’s (which are in force now-not matured) for which already 10% TDS was deducted. How much interest I’ve to show in the e-filing. How much tax I’ve to pay.

    I’ve savings of Rs.1.6 lacs under 80C.

    Can I use my salary money to open FD’s in my wife’s name or my parents(dad is senior citizen) name . Is that interest comes under my income and should I pay tax.

    Pls. guide me sir.

  13. Harry says:

    I had a joint fd in which my mother as a second holder. And fd made by her separate account. But fd count on my PAN no. Because I am the first holder and also maturity cheque issued by my name it was deposited in joint account where my mother as a second holder. How it can show in income tax return filling?

  14. Thankachan says:

    I invested money through my wife in private Bank FDs and earned interest. Now I am about to retire in a couple of months. So can I get back some money from my wife and put in my name? Also whenever money is given to your children (major) as gift, it is necessary to make any gift deed. If so, can you give format of the same. I seek your kind reply

  15. ayush agarwal says:

    dear sir,
    This tax planning of transferring some of one’s funds to his wife requires clarification. If it is given by way of gifts any income accruing from the gifted property/funds will be taxed in the hands of the transferor only i.e Husband only. In that case how it is posssible to effect a tax planning by gifting amount or property to a wife. Kindly clarify. Also kindly tell reg under which sec we can claim the benefit and if there is any form to submit to the employer to claim exemption. Also kindly tell the calculation how its benefits us. for eg. I’m a salaried person with annual income of nearly Rs 5 lakhs. I invest Rs 1.5 lakhs under sec 80c and additional Rs 50k under NPS sec 80ccd[ib]. So my taxable income is reduced to Rs 3 lakhs. And upto Rs 2.5 lakhs No Tax payable. So, Kindly let me know if I gift Rs 50k to my wife then there is no tax payable by me?

  16. Bhagwan says:

    Will transfer of 1.5 lakhs from father’s SB account to major son’s PPF account qualify as gift from father to son for taxing purposes? If it is in addition to 1.5 lakhs put by father in his own PPF account, will both PPF accounts be considered legal?

    Will transfer from father’s SB account to a joint SB account consisting of major son as primary holder and father as secondary holder qualify as gift from father to son for taxing purposes? Will the interest earned on the transferred amount be taxable to the son or the father?

  17. Tarun says:

    My question is that i do a recurring deposit from my father’s income. I am a student so i dont have any income. So the interest earned on the recurring deposit will be part of my father’s income or mine.

  18. v m chavda says:

    Sir
    Whether I can give Rs.1000000/- to my son as a gift,to save tds.please also advise what is limit to give gift to son
    Thanking you.

  19. Rawal Singh Bhati says:

    @Mr. Puneet Sharma

    You cannot take any benefit for payment to your mother

    Because there is no such provision in income tax. [its just household exp]

  20. PUNEET SHARMA says:

    I am married and living with my wife and a kid. My father is expired and mother is housewife and she dont have any source of income. Suppose i am paying Rs 5000/- to my mother who is housewife every month and she does not invests that money. She is using that money for her livelyhood. How can i get tax benefit for this money? Is there any way to get tax benefit for this regular recruring amount?

  21. Rawal Singh Bhati says:

    I’am surprised how a CA can give such ill tax planning.

    You should know the diffrence between tax planning and tax aviodence

    Tax planning means aap chain kinind le sako, tax avoidence means chinta bhari nind lo

  22. Rawal Singh Bhati says:

    I Strongly Suggest you to kindly do not apply this type of ill tax planning

    First it is not planning it is just tax aviodence which is not legal
    So I.T.O will club all such income in your hands. As per sec 60 to 64 of income tax act. (only way you can get safe from this sec is when you made parmanent actual transfer of asset to family]

    Now there is 2nd side of your act.
    Suppose you made transfer of such asset to in-laws family than you cannot able to get money back during their life term[otherwise penalty impose for all previous benifit taken]

    If you go for that you will not take back such asset till death of ur inlaws family then you may be save from income tax act

    But you cannot claim in such property after death [matlab aapke saala saali ke maje]

    If u do it with ur own family then your Brother and sister also get share from such property. [ 10000rs bacha ke 10lac gawa doge]

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  24. Rakesh nainani says:

    please advice me that how i can file a income tax return if i sold my parental home in rupees 40.00 Lacs. This parental house i.e plot was purchased by my father( Late Shri Sevak Ram ) in year 1987 @ cost of rupees 33,000.00

  25. prerak says:

    if father wants to gift 10,00000 Lacs to his son and daughter than how to get this gift. How to calculate the income tax.

    What else do i keep in mind when i received Gifts.

    • Ajay Kumar says:

      I had purchased a vacant land in the name of my wife.House has been constructed. I want to give the property on rent.The income from rent will go in my account or my wife ?Who will pay the income tax against income from rent.My wife is a and has no income.housewife

  26. prerak says:

    if father wants to gift 10,00000 Lacs to his son and daughter than how to get this gift with incometax liability nil.

  27. yashwanth says:

    hi,

    I want invest 2000000 FD in five different national bank’s and i want to take every month interest from those bank’s in india.Do i need to pay any tax amount for that ? or do i need to submit any form 15 g or form 16 like that ?
    After submitting those what is deduction amount and how much can i get monthly amount.

    Regards,
    Yashwanth.

  28. bhagirath says:

    i am earning 16000 thousand per month. now a days i want to sell my plot at 7 lakh what i have to pay tax?

  29. dr siddharth says:

    dear sir, my fiance comes in 10lac annual income bracket

    we have not made any investments as its just started..
    only bought 6000 rs sbi life insurance policy.

    mediclaim, lic, fds, ppf, equity funds… etc are options .. all open.
    so about 1.5lac annually i have to invest..

    how to diversify.. how to get the maximum benefit.. and how much tax would i be paying after all this.

    can u guide me..

    ill be very grateful.. just started earning as doctors,,.

  30. tanisha says:

    I have kept around 20lakhs in fd in a bank. I am a housewife. The bank says that int above Rs.2 lakhs on fd if I have even after giving form 15 G they are bound to deduct tds on fd. Whether any provison is there to avoid tds?

  31. Ravi Desai says:

    Hi

    My fater in law gifted a plot to my wife couple of years back which is about 10 lakhs at present.Now we are planning to sell it off for our child’s education. please guide us. how can we avoid/save tax on that amount?

  32. Nitin says:

    I bought a land in 2005 in my mothers name as i was not available in India. Now i want to sell the plot to buy an appartment for my self. But it will attract the tax liability for my mother (65 year old) if i sell this land as it is on my mother’s name.
    Please let me know, if she gifts me the land what is the procedure and how much will it cost me? I bought that land at the cost of 200 persft and now i am selling it at 2200 per sft.

    Is there any other way i can avoid tax?

  33. Mkg says:

    sir,

    my dad is planning to sell his agriculture land(rubber estate) which satisfy the conditions of section 54b as exempt from capital gain but i would like to know if any tax is payable for he proceeds an futher details.

  34. Ravi Prakash says:

    Dear sir

    i m a (Ravi Prakash)salaried person and i have a 5lac in years salary.my company do not detect in my PF.

    i have a investment to -1lac rent.
    40 k- insurance
    20k-ppf
    10- genral insurance
    25k- kisan vikas path.
    KINDLY Privode to for TAX saving .

  35. mano says:

    Dear Sir,

    I have a house in my name given to me by my dad through a gift deed, now i have booked a 2bhk flat jointly in my mothers name and my self which will be ready for possession in 2016 june, Can i claim IT benefits on the home loan taken for the interest, i am planing to rent my old house and move to the flat. Kindly advice.

    Regards,
    Mano

  36. Virendra says:

    I am a salaried person. My contribution to PPF is 2 Lakh, LIC 48000/- , Home loan interest and capital Rs 75000/-, 80D 15000/-, property tax 22000/- .
    I pay for my son’s education annually Rs 3 lakh.
    My tax per month is about 45000/- thats about Rs 5.25/- lakh from my salary.
    Kindly advise how to invest to saxe on taxes.
    ( gift to wife, PPF for wife/son, gift to parents)

  37. Pardeep says:

    Sir/mam,

    How can i gift money to my wife/son or how i can save tax with my wife/son.
    i m a salaried employee.

  38. Vicky says:

    Hi!,

    My mother is the sole owner of a vacant land and residential building.

    Can well sell the property and pass on the amount to me or my wife without attracting any tax liability to my mother herself, myself or my wife at the same time avail long term capital gains (20 years old property).

    She is a senior citizen below 80.

    If the above is not tax free, is there any other means.

    Thanks & Regards,

    Vicky.

  39. arun says:

    Dear sir,

    For next 2 years I will be posted abroad from my company and will payed 18 to 20 lacks per annum as consolidated salary(Taxable as per Indian ITR slabs)
    kindly let me know the options to save tax other than 1.5 lack under 80c and SD. Also let me know the minimum amount which I have to pay as tax.(I am a single male )
    You expert advice will help me to take informed decision.

    thanking You
    Arun

  40. Dipak rathod says:

    Hi sir,
    I am earning 5,00,000 Per annum and i pay 1,00,000 every year to pay father(not a senior citizen and stay at other City) , will u please give me an information how can i save my tax on this gift amount and what proofs i have to submit to my employer .

    Thanks
    Dipak rathod

  41. Vikas says:

    My wife is earning Rs 18000 PM Approx .through tution and other handicraft work and she is getting money in cash only.She is investing in mutual fund through SIP by depositing cash in her saving account and FD (First name is of her name and second name is mine) is there any tax liability come on her or me due to any means.

  42. Vikas says:

    If i gift some money by transferring through my salary account to my major son who is earning student,what will be tax liability on me or son??How much money i can transferred in a year ? –

  43. Vikas says:

    If i gift some money by transferring through my salary account to my major son who is earning student,what will be tax liability on me or son??How much money i can transferred in a year ? – See more at: https://taxguru.in/income-tax/tax-planning-save-tax-through-your-family.html#sthash.tmDRFq04.dpuf

  44. dr.v.v.purohitt. says:

    dear sir. how much maximum cash i can to my both married dauhters aged 40 & 37 years in assement year 2014-15.how many Rs.stamp i have to purchase for each one to 20 lacs gift by A\C PAYEE cheque SEPARATELY.

  45. Vikas says:

    If i gift some money by transferring through my salary account to my major son who is earning student,what will be tax liability on me or son??How much money i can transferred in a year ?

  46. rita says:

    I sold my flat and kept the amount in saving account can I remove some part of it for personal use? I already booked a flat which is under construction. .

  47. Molly says:

    Sir,
    If Brother gifts money (through cheque) to sister to help her in purchasing a house.
    And Sister having no other income other than FD interest..
    1) Which ITR is applicable to sister.
    2)Where it is required to be mentioned about gift during return file of sister in ITR form.

  48. Pratap says:

    Sir i want your advice in my cases.
    1. My annual taxable in come is 10,00,000 and
    my mother is 78 years old has no income. I ham giveing her 15000 pm in cash for her expense. Can this be deducted from my taxable income?
    if my total salary should be treated as Rs 820000 then where to reflect these 180000 and what documentry proof is required in this regard for filing the Tax Return?
    2. I have gifted a Bike( Rs. 148000) to my son of 21 yrs age. Can this be deducted from my taxable income?where to show it in IT return form?

  49. beena says:

    i am going to sell my fathers property and i will be getting cash worth 40 lakhs, should i collect the maney as dd
    in case of the liquid cash should i put them as fixed dposit in sbi.
    20 lacks in one bank ie sbi ant the other in another bank.i have pan card.
    how much money will be deducted as tax,
    how much will the interest money i will get

  50. Fixed Deposit says:

    Fixed deposits (FD) are one of the best ideal investment tools in India. Fixeddepositbazaar is leading financial information source which provide services such as a Fixed Deposits, Bonds, and Debentures etc.

  51. ds sandhu says:

    DEAR SIR,PL LET ME KNOW IT.IMPLICATIONS ON BUYING A VEHICLE WORTH RS 9 LACS IN THE NAME OF MY SPOUSE IN CASH.BOTH OF US FILE OUR ITR REGULARLY.RECENTLY I AM A RECIPIENT OF RS.5 LACS FROM LIC AS MATURITY CLAIM.THANKS

  52. Vipul shah says:

    dear sir if i give a gift in the form of cash and if she deposit that amount in the bank and she get interest from that fixed deposit than is it taxable .
    vks_007@rediffmail.com

    Thank you

  53. sunil agrawal says:

    I have owned one Residential land. which i want to gift my brother. the market value of the property is approx 8.00 lacs. whether i have required to pay capital gain tax or not

  54. yamini says:

    i pay 3,00,000 every year to pay father(not a senior citizen) , will u please give me an information how can i save my tax on this gift amount and what proofs i have to submit to my employer .

  55. Sowjanya says:

    Sir i want your advice in my case.
    My annual taxable in come is 7,00,000 and
    my father is 62 years old has no income. Sir i want to know that can I gift my father a sum of Rs 2,00,000 to reduce my income to 5,00,000.

    if my total salary should be treated as Rs 5,00,000 then where to reflect these 2,00,000 and what documentry proof is required in this regard for filing the Tax Return?
    Can I online transfer 2,000,00 in father a/c and will statement of my and father a/c will work as proof?

  56. BANWARI LAL says:

    my total income is 600000/ can I fit for 87a benefit of 2000/

  57. hemen parekh says:

    To Be or not To Be ?

    Shakespeare would say , ” That is the question ”

    For Federal Reserve Board of Revenue ( Pakistan ) , that question was ,

    ” What to publish ? And what not to publish ? ”

    It seems , in Pakistan , only 1 million people [ out of a population of 140 million ] , pay income tax

    Finally , the Board published the names of those 1 million ( running into a 17,000 page directory ) , with the amount of tax paid by each

    To give to Pakistan , a loan of $ 6.7 billion ( approx Rs 41* Thousand * Crores ) , the International Monetary Fund ( IMF ) , insisted on such a publication

    Now , in India , we have 40 million people who pay personal income tax ( out of a population of approx 1220 million )

    Obviously , for India’s Income Tax Department , it would be an impossible task to publish their names in a directory – which could possibly run into 17,000*40 pages !

    Then again , India has no need for an IMF loan , what with its Personal Income Tax revenue amounting to , Rs 2.47*Lakh*Crores

    And if the incoming government at the Centre , dares to implement my suggestion of INVERSE TAXATION regime , that revenue could go up 100 times !

    Simply , ” Inverse ” the tax slabs as follows :

    > Up to Rs 2 lakhs………………… NIL
    > 2.1 – 5.0 lakhs…………………. 10 %
    > 5.1 – 10 lakhs………………….. 8 %
    > 10.1 – 20 lakhs…………………. 6 %
    > 20.1 – 50 lakhs………………… 5 %
    > 50.1 – 100 lakhs………………… 3 %
    > Above 100 lakhs…………………. 1 %

    What is likely to happen with such ” INVERSE TAXATION ” regime ?

    Following few things :

    > Total personal tax payer base will go up dramatically from current 4
    crores tax-payers

    > Total personal tax collection too , will rise dramatically

    > with this ” INVERSE TAX REGIME ” , there will be no incentive to evade
    taxes and to generate ” BLACK MONEY ”

    > There will be no resistance to accept ALL payments by cheque / electronic
    clearance !

    > The more you disclose as your income , the less you pay by way of taxes
    ( Of course , incrementally )

    > For a change , we will learn to reward honesty / efficiency / productivity !
    No need to bribe those Income Tax officers !

    > Lakhs of crores of BLACK MONEY , stashed away in bank
    lockers / gold / land – and , of course those Swiss bank accounts – will ,
    become ” WHITE MONEY ” , overnight !

    > There will be a huge surge in bank deposits ( – even with , the inevitable
    lower interest rates )

    > Banks will be awash with funds to finance businesses / infrastructure
    projects etc , encouraging entrepreneurs / self-employed to set up new
    businesses ( at 2 % interest rates of loans ) and generate millions of jobs

    > There will be a phenomenal rise in Capital Markets

    Only questions are :

    > To innovate or not ?
    > To think out-of-the-box or not ?
    > To feed poor or to teach them how to fish ?
    > To enable people to earn more or to subsidize their expenditure ?
    > To let people stand on their own legs or continue “Dependency Culture” ?

    * hemen parekh ( 18 April 2014 / Mumbai )

  58. AM says:

    I have invested Rs.10000 in 5 year Tax-saving FDR in April 2014. Can I claim it for tax benefit for FY 2014-2015?
    Also, can the same be used for tax benefit in subsequent years till next five years or do I need to invest every year in new FD to claim benefit?

  59. Sudeep Bansal says:

    Dear Sir,

    I use to transfer Rs. 10,000.00 every month to my Mother’s a/c. And my mother in not a Sr. Citizen. Which means I have transferred in total Rs 1,20,000.00 in the financial year 2013-2014.
    My Question is – How can I get the tax benefit from the above Case.

    Please let me know.

    Thanks in Advance.
    Sudeep Bansal

  60. Srini says:

    Sir
    I just opened a FD in my wife savings account for 10 lacs.

    Though I’m a salaried person & filing TAX every year, I afraid that

    this FD (10 lacs) will get me IT notice.

    Kindly clarify me will I get IT notice or not. & what to do if i receive

    notice from IT

  61. Chandrakant Singh says:

    Sir,
    How Much Cash gift my wife can take from her parents/brothers..

    Rgds
    Chandrakant

  62. mahesh` says:

    Dear sir,
    hope you are fine

    plz.give income tax planning.my yearly salary is 600000.so how i can save my tax.
    plz.give the suggestion.
    i waiting your valuable reply

  63. Bijendra Kumar says:

    Sir/Madam
    I need some clarification on following points:-
    1) I have made an investment of 70000 in the name of my father, who is currently 64 years old.
    2) Can i get tax benefit on above investment?
    Thanks in Advance
    Bijendra Kumar

  64. Smita says:

    Hi Sandeep,

    Ramesh Kumar point is valid. please let us know your view on both points of him.

    Ramesh says;

    Your most valueable Advice as ” Tax Planning- Save tax through your family” on
    AUGUST 7,2010, you have advice that-
    “Assuming that………….. say you gift Rs 28 lakh to each parent in cash……………..”
    I WOUL LIKE TO REQUEST ON THE FOLLOWING- 1. HOW MUCH AMOUNT “IN CASH” CAN BE GIFTED TO THE BLOOD RELATION ?
    2. “you may give interest-free loans to your adult children so as to legally reduce your taxable income.” I WOULD LIKE TO KNOW THAT HOW CAN I REDUCE MY TAX LIABILITY ON INTEREST FREE LOAN TO MY BLOOD RELATION ?
    eg. MY ANUAL INCOME IS
    Rs. 8,50,000.00
    LESS :U/s: 80C Rs. 1,00,000.00
    LESS :GIF[TO SON]TRs. 5,50,000.00
    NOW, CAN I ASSUME MY TAXABLE INCOME WILL BE Rs.2,00,000.00 [?]

  65. Ashok says:

    I am married person and mama of my wife is residing at UAE. He wants to gift some amount to me. may i know the same amount can be treated as free gift? if it can be treated as free gift so please provide me any circular no for future and please advice which type of gift deed we have to do???

  66. ap mishra says:

    i have been given loan by my parent to clear my house building loan,kindly guide me how to reflect this amount in my income tax return and method of paying back this amount .
    thanks

  67. molty says:

    Can I pay salary to my wife for working in my company & will her salary be eligible for all the available tax deductions individually

    Thanks!

  68. Sunil says:

    Sir, My father recived 25 Lacs. as retreiment , I want to know that he can give me 10 lacs so i can invest in FD. Second Question, the interest of FD is my income or my father income

    Kindly advise me on this issue.

  69. Jagat Santoshi says:

    Hello
    I am planning to start a recurring deposit for 21 months 4000/- a month.
    Can I show these savings to receive income tax exemption under 80C?

  70. Kamal Kant Sharma says:

    Hi Sir,
    I want to give a gift of Rs.1 lacs to my parents for their house hold expences , kindly suggest us what documents will be submited to tax return file which can show that Rs 1 lacs is paid as gift to parents.

    A humble request kindly suggest us as soon as possible on today or tomorrow Morning.

    Best Regards
    Kamal Kant Sharma
    #7520022092

  71. DABASCO says:

    My father in law wants to gift a residential flat in Kolkata with an estimated valuation of Rs 15 lacs. He wants to make a registered deed paying the stamp duty as per present valuation.
    I have a taxable income in 20% slab. What tax implications can come upon me?

    Kindly advise me on this issue.

  72. sanjib kumar roy says:

    Dear Sir
    I have some simple questions to ask you…..
    1. I have some kishan vikas patras whose accrued interest in the current fi year is rs. 99000/-. now if I invest rs. 150000/- with interest rate 10% per annum in this year what will be my taxable amount for the current financial year? Is it Rs. (99000 + 10% of 150000) = Rs. 114000 or Rs. (99000 + 150000) = Rs. 249000 ?
    2. What is the maximum amount I can gift to my wife / parents in a financial year? Is gift taxable?
    3. Is the only interest gained from FD is taxable in a fi year and not the total investment amount? If it is so then one can Invest Rs. 20 Lakhs with interest rate 10% (interest gained from it is Rs. 2 Lakhs) + 1 Lakh in 80C for a fi year. Am I correct?
    4. Does investment instruments like mutual fund, shares, IPO, NCD, Bonds fall under same category of FD ( means only the interest is taxable, not the total investment amount)?

  73. rajinder says:

    If the income from fixed deposits from bank for senior citizen (form 15H submitted) exceeds Rs. 2-5 lacs
    then will the bank deduct TDS on excess amount or on the total interest earned.

    Please reply.

  74. SHEKHAR says:

    This is best article i searched for Tax Planning and also up to date.

    I want information that can i get TAX saving benefit from my current Education SAP Delphi computech having fees 1.68 Lakh

  75. Manoharan says:

    want s to know about the provisions of u/s.64 of the incometax act. that is income earned from my mother’s deposit and recently my mother passed away and I want to declare my mothers interest income clubbing with my salary income.is it possible to do it? 

  76. antony says:

    If the 20 lakhs is splited among four members i.e 5 lakh each to
    1.dad
    2.mom 3.daughter
    4.daughter.Both daughter are major.They are putting in one year fixed deposit.And getting the interest monthly.Whether they have to pay income tax. ..for tax free interest What we have to do.Whether to put along with senior citizen.Give me suggestion

  77. Sivaram says:

    Dear Mr.Saurabh, Well noted, thanks. For example, I transfer that surplus amount of Rs.2.00 lakhs to my mother’s a/c and through which I am making deposit at her name. After decease of my mother, as a nominee, I will be going to get the sum adding interest totaling 2.50 lakh (Approx). In that time what will be the tax measure when I get the maturity proceeds. Whether the entire 2.50 lakh would be added to my gross income during that time of getting the maturity proceeds or else I will have to pay the tax on the differences of actual less interest earned (0.50 lakh)? Or the income generated on and after getting the maturity proceeds only I am liable to pay tax? Kindly check and help us to make the valuable suggestion made by respective author.
    Thanks, Regards, Sivaram

  78. Sivaram says:

    Dear Mr Sandeep Kanoi, I have cleared now thanks. From your text I understand that the interest income nothing but the normal income. So, after clubbing the interest income to the other income if any and aggregate total of that is not exceeded the fist slab then the assessee need not to pay tax or if anything had been deducted by organisation then they will have way to get the refund filling the rax return. Pls confirm.

  79. Sivaram says:

    Dear Mr Sandeep Kanoi, Noted and thanks. Even if bank deducted TDS on and above 10000/- interest payment on our deposit, it can be reimbursed from the tax authority showing or including entire interest income of Rs.1.40 lakh in returns, if there was no other income earned by my parents. Kindly check and confirm on my view.

    • CA Sandeep Kanoi says:

      Obviously author has assumed that parents do not have any other Income. TDS they will get refund by filing Income Tax Return and Claiming the refund. If taxable income not exceeding basic exemption limit they can submit Form 15G or 15H as applicable to bank to avoid deduction of TDS on interest income.

  80. Sivaram says:

    Dear Sir, Kindly explain how will the interest on bank deposit of Rs.1.4 lakh on the deposit amount of Rs.15 lakh make tax free in the hands of parents? I believe, bank interest are something like a short term investment where the exemption is fixed upto Rs.10,000/- a year. In my view it cannot be taken as fully in their tax slab. Your assistance will be more useful for us.

  81. Pugazhenthi says:

    Sir,
    I am now working in middle east and I used to send my salary to my wife bank account.
    She used to deposit in her name and now the bank informs her that from her FD deposit from her account, the interest amount comes around Rs 3 lakhs per this financial  year and she has to pay Rs 36000 as income tax.
      Now can u suggest  me how in this condition for the current financial year till march 2012, in what ways, tax can be avoided as we failed to put some amount in our elder daughter (aged more than 18 yrs) or in my own name. Could you suggest now if we transfer the FD amount now in my name or my elder daughter name, whether IT dept will agree for tax avoid.
    Pl reply to my mail ID.
    Thanks 
    V.Pugazhenthi

  82. Saurabh says:

    Dear,
    I think you are still confused, by transferring Rs2 lacs to your father will not allow as a deduction from your taxable income what you can save is tax on income generated by investing such Rs.2 lacs.

    Example: Suppose your income from salary is Rs 7Lacs in A.Y 2012-13 then you have to pay tax on such 7 lacs(after deducting various deduction) however out of this income you saved Rs2 lacs which you may invest in FD. Now the topic will come in to picture, if you invest in your own name then you have to pay tax on interest/income generated by such investment (if interest amount is Rs20,000 and you are falling in 20%tax slab then you have to pay Rs4000 as tax) on the contrary if you will invest in your father name then you can save such tax i.e Rs.4000.

  83. manish vaishnava says:

    when minor’s income is clubed with father’s income then can deduction under section 80 c can be taken by investing in fdr

  84. Amber says:

    Sir i want your advice in my case.
    My annual taxable in come is 7,00,000 and
    my father 66 years old has no income. Sir i want to know that can I gift my father a sum of Rs 2,00,000 to reduce my income to 5,00,000.

    if my total salary should be treated as Rs 5,00,000 then where to reflect these 2,00,000 and what documentry proof is required in this regard for filing the Tax Return?
    Can I online transfer 2,000,00 in father a/c and will statement of my and father a/c will work as proof.

  85. AshwiniKumar.S says:

    Hi Sir,
    I am a salaried guy and my wife is a home maker who has got a new Pan card recently.She does not have any source of income.
    I open a fixed deposit in a bank in my wife’s name by making a deposit of around 1lakh for a year at an interest rate of 9% (which does not exceed 10,000 which would invite TDS).Should my wife file tax returns at the end of the financial year?
    Ashwin

  86. Sunil says:

    Kindly advise me whether investment made in PO Recurring Deposit in the name of my children who were minor when the account commenced.

    Would my children (who would be major when the account matures) or me be liable to pay income tax on the interest earned when the recurring deposit matures.

    Can one use indexing in calculating income tax on interest earned in RD accounts, FD, or Time Deposit accounts.

    Regards
    Sunil

  87. Vikas Yadav says:

    Sir i want your advice in my case.
    My annual in come is 5,30,000. i pay around 15 thousand per month to my mother for her house hold expences.
    Sir i want to know that these 1,80,000 is an income of my mother from my salary so does i have to pay tax for these 1,80,000 or it would be exempted from my total income, and i would have to consider my total income as 5,30,000-1,80,000 = 3,50,000/-. if my total salary shuld be treated as Rs 3,50,000 then where to reflect these 1,80,000 and what documentry proof is required in this regard for filing the Tax Return?

  88. Vijaya says:

    I am writing to clarify to certain readers what the author has not clearly brought out in his article.

    1. Your income is wholly taxable in your hands.

    2. If you make investment out of your income in your own name (eg FDS, property to rent out etc) the income from such investments will also be taxed in your hands.

    3. Therefore, the author suggests that investment should be made in the name of the family member to the extent income generated from this does not exceed the nil tax limit.

  89. AMIT BAJAJ ADVOCATE says:

    Good Information has been given in this article for layman. One can transfer his business as gift in his Mother’s name or his Father’s name if his father is a senior citizen. That way more tax exemption can be availed of under income tax act without attracting any clubbing provisions.

    Similarly if one is having an FDR or other investment and he is earning income therefrom. In such case if such FDR or other investment can be transferred by way of gift to senior citizen parents then income from such FDR or investment will get benefit of higher exemption limit under Income Tax Act in the hands of senior citizen parents if the parents have not exhausted their full exempted limit from their own income.

    Similar will be the case if such investment is transferred to major children by way of gift, who are not having any income. The seperate exemption of rs 160000 or 190000 as the case may be, available to major male or female child can be availed of this way.

    That is tax planing through your family and it will not attract any clubbing provisions.

    The article is good one and no suggestion has been made in the above article, following which, will result in attracting clubbing provisions.

  90. samrat says:

    hi
    thz for the updates. well i would like to know that can a gift be given to my H.U.F file also with out paying gift tax .

  91. CA DEV KUMAR KOTHARI says:

    Mere tax planning is not good, it must appear to be planning of finance and for future.

    In any case of transfer of property and holding investment in name of others persons major factors to be considered are own age, age of children, time gap in their attaining majority, age of parents / parents in law, and also future contingencies as to death of any such person and his legal heirs who can claim property /relations in changing times etc.

    I add :Financial planning for minor children:
    By gifting, purchasing and holding assets which do not bring in higher taxable recurring taxable income, but appreciate in long term can be useful financial planning for parents as well as minor children. For example, equity investment (shares/ MF) in hands of minors bring in lower taxable recurring income but can appreciate and capital is built up over long period of time when child is major and need capital it can be realized. Similarly investment in land and building even own residential property in name of/ or account of minor can be planned to take benefits of exempted income and appreciation.
    Gold, silver, and jewelery can be purchased in a/c of minor children/ major children also as there is no recurring income and there is appreciation.

    In view of future contingencies as to death, and changes in relationship retaining control is also essential whetehr investment be made in name of children or parents or anyone else – the properties can be held in joint names.

  92. RAMESH KUMAR THAKUT says:

    Sir,
    Your most valueable Advice as ” Tax Planning- Save tax through your family” on
    AUGUST 7,2010, you have advice that-
    “Assuming that………….. say you gift Rs 28 lakh to each parent in cash……………..”
    I WOUL LIKE TO REQUEST ON THE FOLLOWING- 1. HOW MUCH AMOUNT “IN CASH” CAN BE GIFTED TO THE BLOOD RELATION ?
    2. “you may give interest-free loans to your adult children so as to legally reduce your taxable income.” I WOULD LIKE TO KNOW THAT HOW CAN I REDUCE MY TAX LIABILITY ON INTEREST FREE LOAN TO MY BLOOD RELATION ?
    eg. MY ANUAL INCOME IS
    Rs. 8,50,000.00
    LESS :U/s: 80C Rs. 1,00,000.00
    LESS :GIF[TO SON]TRs. 5,50,000.00
    NOW, CAN I ASSUME MY TAXABLE INCOME WILL BE Rs.2,00,000.00 [?]

    • administrator says:

      You wrongly interpreted the article. Gifting to son sill not be reduced from your income.
      1. You can any amount.
      2. Interest free loan we would not suggest.
      3. Gift can not be reduced from your taxable Income.

  93. CA Maneet says:

    With due respect to ur article i would like u to clarify the advice by taking examples and also consider clubbing provisions in the examples. Where ever possible also mention the relevant sections.

  94. Yogesh says:

    Hi Sir,
    I have booked a flat with my wife’s name. Now we have taken home loan from IDBI bank with joint name. As per requirement of bank, EMI need to pay from my salary account. My wife is also working.
    1) As EMI is deducted from my account only. How my wife will also be able to make tax benefit for home loan?
    2) To get tax benefit of home loan should we need to make some agreement or we can take tax benefits by mutually understanding.

  95. Deepak Joshi says:

    i cannot understand what type of PLANNING is thr?? in all cases , the money will be taxed in habds of transfereor at source…neone cn ask fr a bank detail n trace these transaction n ask fr reasons of such wealth of husband…he has 2 pay tax!!!

    • administrator says:

      Clubbing Provisions applicable only in case of wife in which gift not been suggested. You can do other plannings i.e. doing business in wife’s name.

  96. AMIT BAJAJ ADVOCATE says:

    The clubbing provisions are not attracted in the cases mentioned above in this article.

    Gift to parents and in laws parents and gift to major children from parents will not attract any clubbing provisons. However no gift should be made to the spouce as it will attract clubbing provisions.

  97. D.R. Sastry says:

    Before you publish, please do some research, and also before you dole out free advise, please ensure that the planning is fool proof and help full to the asessees, through out the article, the clubbing provisions u/s 64(1)which talks about clubbing of income in the hands of the assesse, in certain circumstances, have been ignored, while framing the plan, necessitating the gullible assesses to pay tax even on the income earned in the hands of the children as well.

    • administrator says:

      For sure. We have considered the provisions of section 64. If you have any advise in respect of this article do mail us the same.
      Thanks for commenting

  98. suresh babu says:

    This tax planning of transferring some of one’s funds to his wife requires clarification. If it is given by way of gifts any income accruing from the gifted property/funds will be taxed in the hands of the transferor only i.e Husband only. In that case how it is posssible to effect a tax planning by gifting amount or property to a wife. Kindly clarify

  99. Yesha V. Revdiwala says:

    what will be the effect of clubbing provisions in this planning

  100. atul says:

    will u please give me an information about to save the tax liability of an earning member through minor child & house wise.

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