Mother's Tax liability

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Anjana (Querist)
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27 February 2010 Hi,
I have a question regarding taxpaying. I have lost my father last October 2009.He was a retired person and he filed his return (thought he had no tax to pay).

Now with his sudden demise,my mother has received a lumpsum amount of Rs 1.5 lac from LIC Varistha Bima Yojana & an amount of Rs 1.09 lac from Employees Provident Fund & now she receives a regular income of Rs 545 as monthly pension from EPF.Other than this she receives some minimal amt as dividend from shares which are in the name of - [a]my father only [b] my mother & my father both.

My Mother is a housewife.And now with my father's demise will she be required to pay tax?If her income is taxable for this year & then not taxable in the next year then does she still hve to file return next year also. Will the 2 lumpsum amt that she has received from LIC & EPF be taxable? Is there any manner by which I can save tax ( as she is financial not strong)?Please suggest some investment option for her keeping in mind that she has a studying son(for which they may need maney soon) & a married daughter(ie me). I have heard some investment option-

[a] MIS - but there the money will be for 6 yrs & penalty will b there if I withdraw before 6 yrs but MIS is exempt from tax?

[b] FD - but it is not tax exempt?

I need to know about investment that will not have a long duration & also be tax exempt.

I will be highly grateful if someone reverts me back with suggession as I am totally confused.

Thanking you
Anjana

Anjana

Anjana (Querist)
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15 March 2010

Anjana

Anjana (Querist)
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15 March 2010 m

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Guest (Expert)

16 January 2011 I don't think that your mother is getting substantial income for taxation. Income on account Insurance policy and PF etc. are not at all taxable.