Opening Fixed Deposit

POSTED BY Jayakrishna K ON November 1, 2011 10:15 pm COMMENTS (4)

Hi ,
My mother is a housewife, she has an SBI account and she dont have any other source of income.
I am planning to transfer some amount of my income to her account & open a Fixed Deposit (online FD -e-TDR/e-STDR) , and then submit Form 15G to avoid TDS .Is this legal? Do I need to show the interest amount in my IT returns & pay tax according to my tax bracket ?

4 replies on this article “Opening Fixed Deposit”

  1. ashal jauhari says:

    Dear Kalyan, Please do note in case you are gifting to your wife, the interest earned from the bank FDs ‘ll be taxable in your hand under the clubbing provisions of section 64.

    So please do not gift money to your wife.



  2. kalyan says:

    Hi Ashal,

    Can the same thing be done if the amount receiver is wife instead of mother..?
    Thank you.

  3. ashal jauhari says:

    Dear Jayakrishna K, First of all please prepare a gift deed on a plain paper mentioning the amount gifted to your mother from you. Also mention the cheque/netbanking details. Get it signed by both of you.

    Once the amount is in mother’s account, it’s her own money now & any tax liability on the income from this gifted amount ‘ll be on her only.

    Instead of e – TDR or e – STDR , I w’d ask you to open a regular bank FD if your mother is 60 or more years old, to be eligible for extra interest meant for Sr. Citizen. In case the annual interest from such FDs is going to be more than 10K Rs. please file form – 15G (if mother is not a Sr. Citizen) & 15H (if she is a Sr. citizen) along with the copy of her PAN Card.



  4. Abhishek says:


    Any money in a form of a gift to your Mother is tax free in her hands. You can do the above legally. You dont need to show the interest amount in your IT Returns as it will be added to your mothers income and will be taxed accordingly as per her tax bracket.


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