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POSTED BY ON January 3, 2014 2:45 pm COMMENTS (3)
Hi, I initially own a S/B account in SBI. I have couple of FD’s as well linked in the same S/B account.
Later, I have modified my S/B account to joint with my spouse’s name.
As I am a employee earning a salary on which I pay tax, but my wife is a house wife with no income. I want to understand – To save the taxes do I need to put my wife’s name as first acocunt holder and my name as secondary and then submit Form 15G, or can I do it now as well without changing/swapping the first and last names in S/B account?
Additionally, since the FD’s were opened in my name so is it possible to save tax now?
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Hi Shahab5823,
If you want to lock your money for longer term (say 15 years) then you can open an ppf account for your wife, you will get interest rate close to FD and the interest earned at the time of maturity is tax free.
Thanks,
Rahul
Forgot to mention, you can save at the max tax on Rs 1,00,000
Dear Shahab
According to IT rules the interest from products like FD etc will be combined to the income of the person who is the source and is not based on whose name the FD is opened. Like even if you had opened the FD in exclusively your wife’s name then too the interest you get on FD would be clubbed to your income as you are the source of that principal and then income tax would be calculated.
Thus you will have to find out some other ways to save income tax. There is no role of changing the order of sequence in the bank records. IT dept will not consider whos name is first. It will consider only source of income at the time of a dispute
thanks
Kishan