23 April 2009
I have few queries in Treatment of Bank Interest earned by joint holders in the below cases so please answer separately for all the cases...
Case - 1: An assessee earns salary income & deposits it in Saving Bank A/c in which her mother is joint holder, then can we show bank interest earned during the year in her mother's return instead of assessee?
Case - 2: If we make fixed deposits from the salary deposited in the SB A/c then can we show interest earned from such Fixed deposits during the year in her mother's return instead of assessee?
Case - 3: If both assessee & her mother earns income & deposits in such joint Saving Bank account then what treatment should be given to bank interest earned during the year & in whom return will it be shown?
23 April 2009
Generally interest will taken in the return of persons whos name appear first in the bank account.
Case 1 In case one mother is only joint applicant for the account. She actually does not make any deposit. So whatever interest earned will taxable in the hands of son.
Case 2 Basically the amount of FD was from salary income. Adding other person to FD does not change the substance to the income. Still it will be taxable in the hands of son.
Case 3 If both earn income & that is deposited in the same account, in that case interest needs to be apportioned on the basis of amount of deposit to the account.
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