POSTED BY September 2, 2012 5:07 pm COMMENTS (4)ON
Dear Forum members,
I plan to invest 5L in Fixed deposits for a period of 5 years. I have a few options in doing this but primarily I want to take an option that will have the least overall tax liability.
Option 1: Invest it in my daughter’s name (aged 8 yrs) with my wife as Joint / guardian.
Option 2: Invest it in my wife’s name (Housewife with no tax liability currently)
Option 3: Invest it as a Joint with my wife, my wife’s name as the First Holder and Mine as Second.
I have read elsewhere that – “If you invest in a child’s name, the income earned is clubbed with that of the parent who earns more and is taxed at the applicable rate.” Is this rule correct?In that case, Option 1 – the interest income will be added to my income.
Request your inputs on the better option to enable to take an informed decision.