Know About Tax Saving Tips Using Your Family Members

Syed Muskan

Tax Liabilities

Under Income tax rules, savvy investors have many opportunities to reduce their tax liabilities, and many of them involve taking the help from family members. The strategies used aren't just about efficiently lowering tax liabilities, but also ensuring financial security. 

Financial Stability

Strategies: Investment via Non-Working Spouse

If one gifts money to his/her non-working spouse and he/she invests it, the tax department will include the earnings among the income of the working spouse. But there will be no tax implication if one invests in tax-free instruments.

Tax Free Investment

Fixed Deposits in Parent's Name

Traditional fixed deposits might not seem like a tax-savvy option, but if placed under a parent's name, one can make them more tax-efficient.

Fixed Deposit

Investments In the Name Of Senior Citizens

Investing in the name of senior citizens, particularly parents or grandparents, can yield tax-free interest. If senior citizens do not already have investments, Schemes like the Senior Citizens' Saving Scheme (SCSS) offer safe avenues for investments and can provide tax-free avenues.

Schemes

Investments Via Adult Child

Due to the inclusion of interest with the parent's income, investing in minor child's name is not effective. However, once the child turns 18, their earnings are viewed separately for tax calculations. By investing up to Rs 1.5 lakhs annually in their PPF account, parents can get an additional avenue for tax benefits and also secure their child's financial future.

Compiled by Syed Muskan

PPF Account