Topic: MY father being senior citizen, I want to invest in FD by his name and avoid tax deduction?

This message was edited 1 time. Last update was at 10/12/2009 14:42:44

I intend to invest Rs.75,000 in FD's offered by Tata Motors Ltd. Since my father is a senior citizen and the rate offered to them is .5% higher that to others, I wish to invest the amount in his name and make initial payment through his account. I recently came to know that if Interest payable during a year is more than Rs.5,000 then TDS @ 10% shall be deducted from the annual interest payable. If this deduction happens the whole purpose of investing in my fathers name will be defeated as he only has pension income and being a senior citizen does not fall in taxable slab. Is there a way to avoid such Tax deduction.

Well the good news is, you can certainly avoid tax deduction on the FD interest accruing annually to your father, all you need to do is along with the documents you fill for investing in such FD also furnish Form 15G in duplicate, this form states that the person investing does not fall in taxable slab and hence no tax deduction is required.

the above reply is good but make sure that your father has sufficient source of income to make the investment

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