How is tax liability calculated in case of joint accounts?

POSTED BY Ravi ON May 5, 2013 11:06 am COMMENTS (26)


My wife and I have a joint account. I am in 30% tax bracket and she is in 10%. I just wanted to understand that if any income (interest from FD, RD etc) is generated from that account, how is the tax liability calculated for such joint accounts? Is it 50-50 or some other method comes into play?


26 replies on this article “How is tax liability calculated in case of joint accounts?”

  1. B.Prasad says:

    Me and my brother have a joint savings bank a/c in S B I.Income from rent and sale of the prat of property is deposited in our joint names in the a/c.Who is responsibleto pay the I T. on the S B inerest earned jointly by us ?

  2. mallika says:

    I am a joint account holder with my husband for a savings account and cheques issued in my name are also deposited in this account. As my husband is having the primary- first name for the account, can he file IT returns with his PAN no ??

    1. Your cheque money will only be considered as your income. If his personal income which is deposited in that account is exceeding the tax limits, then only he has to file the returns. Else not !

  3. Jayesh Duggal says:

    I have a joint account with my Dad and Mom. So there are 3 joint holders in the account. I am the first holder of the account. Lets say there is a income of 5 lakh Rs. and it is deposited in this bank account. While filing income tax return whose income will it be counted on, me or split equally between all three.

  4. Absarul haque says:

    I have a joint bank account with my father n we are doing same business cannot show income separately. We want to file return separately with same bank account..can we do so???

    1. No you cant. If the money is coming in one single bank account, then its treated as that person income only

  5. Umesh says:

    My sister-in-law gave money to my wife (house wife) and my wife invested in Some schemes earning profit out if it. Also my wife has separate PAN no. where do I need to show the interest accrued through the scheme?

    1. If the total income of wife is not above the taxable limit of 2.5 lacs, then you dont need to file returns. Otherwise you need to file returns. But you should check with a CA on this matter.


  6. Mark says:

    I and my mother hold a joint account in a co operative bank, I am the first holder in the account and she is the joint holder. This account is exclusively used by her and t is the designated account where returns from her investments and fixed deposits are credited.
    To prevent confusion I wanted to remove myself as the first holder and make my mother the first holder and I become the joint holder. Is that possible?

    1. You can surely remove yourself. But you need to prove that all the transactions were done by her for transactions till now

      1. neha says:

        will it be become a tax problem?

        1. Not at this point !

  7. skgoel says:

    My wife and I have a joint account. i am first account holder and my wife is second applicant ,recently my wife sold a piece of land and deposited the proceed received through cheques in this account. whose income will it be treated . please advise


    1. It will be treated as her income as the money from from her side !

  8. DEEPAK says:

    i have a joint account with my father and my father is primary account holder. I booked online FD’s in our joint account with my father name and my name. In this case who will bear the tax burden as PAN no. in FD is of my father. whether i have to show this FD in my ITR.

    1. It depends from where did the money come ! .. was the source of money your father account or yours . If it was you, then you will pay tax

      1. Raj says:

        Same question.. have a follow up – say FD of 1Lakh resulted in an interest of Rs 10000 (assume 10%).
        How should this income (interest income) be declared? Legally does this income come under income of the primary account holder (fathers PAN)?

        1. Jagoinvestor says:

          FD intertest is obviously treated as income and tax has to be paid. Only 10k interest from saving bank account is exempted.

          Also for senior citizens, 50k interest from FD is exempted!

          You have to declare this in ITR and also pay tax

  9. Girish says:

    I wanted to know how do i create a joint account in State bank. Th e-form just lets me add two applicants., but i need to open a joint account for 3 . Since it will be used for loan purpose. Also one of the applicant is my mother who doesnot have any address proof for the current address. I have my bank statement and HR letter for current address. What can i produce as address proof for her

    1. You need to visit the branch in that case and talk to them !

  10. BASU says:

    under whose direction Primary account holder in joint bank account is held responsible for paying tax / bank deduct tax in his name and issue TDS

    1. Hi BASU

      I am not clear on what is your question. Please repeat it with more clarity


  11. Ravi says:

    Thanks Syaman and Ashal for your response.

  12. Dear Ravi, even though it’s a joint account & bank ‘ll deduct TDS on the basis of 1st account holder, still if you can prove that FD interest is generated on the amount invested by your wife & not you, the same ‘ll be taxable in your wife’s name. So from taxation point of view, even in joint account, one who pitches money in ‘ll pay tax on the interest income from FD & RD.



  13. Syamantak says:

    The tax burden goes on the ‘first’ holder of the account.

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