Do I have to file return if I have Only interest income below exemption limit

POSTED BY Rudi M ON May 28, 2013 2:24 pm COMMENTS (7)

I am a teen and my mother a housewife.  My grandfather was senior citizen and passed away recently of cancer.  He had fds worth apprx 20 lacs with us as nominees.  If those fd are in our name do we have to pay IT.  We have no other income as of now.

How do we split the FD so we are not taxed?

 

7 replies on this article “Do I have to file return if I have Only interest income below exemption limit”

  1. bemoneyaware says:

    Rudi sorry to hear about your grandfather.
    Coming to your question
    Have you claimed the FD of your grand-father ?
    Banks normally let the term deposit of the deceased accountholder mature. But as a nominee of the term deposit, you can ask for a premature withdrawal by furnishing the death certificate and your identify proof.
    If you hold on to deposit:then
    the interest income (including interest accrued up to the date of hisdeath) will be income of your grandfather and you’ll show it in the return of income you’re mother would be required to file on behalf of and as legal representative of your grandfather (u/s 159 of the IT Act).
    If you continue the FD then to avoid TDS you need to submit Form 15G.

    Bank cuts TDS on FD if interest on FD is more than 10,000 Rs. To prevent bank for cutting the TDS people need to submit Form 15H/15G.
    Did your grandfather submitted Form 15H/15G for non deduction of TDS.?

  2. bemoneyaware says:

    Rudi I am impressed that you are taking interest in the financial matter of your family.
    As it is your grandfather’s income and you have only inherited you don’t need to pay tax on it.

    As per the Income Tax Act, 1961 where a person dies, his legal representatives shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the similar manner and to the same extent as the deceased.
    For details TAXATION OF INCOME OF DECEASED PERSON – PAY TAXES EVEN AFTER DEATH

  3. Dear Rudi, yes is the answer.

    thanks

    Ashal

  4. Dear Rudi, in this case the interest earned by you in your named FDs is your income. Same is the case for your mother. As yu & your mother’s ‘ll not earning more than 2L Rs. individually from FDs under respective names, there is no tax on both of you. Yes as the interest earned ‘ll be more than 10000 Rs. in a FY, bank ‘ll deduct TDS. To save this TDS, both of you should fill the form 15G & submit the same to bank.

    Thanks

    Ashal

    1. Rudi M says:

      Thanks a lot Mr. Jauhari, so we dont have to file a return am I right? We will fill the form you mentioned and hand it to the bank.

  5. Dear Rudi, what’s your age & what about any other income for your mother? What about your father & his income if any?

    thanks

    Ashal

    1. Rudi M says:

      I will be 18 in November my mother is housewife, she has around 6 lac in fd of her own, No other household income. Father does some part time work doesnt earn more than 1.5 lac a year

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