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Tax on transfer of amount

krishna (executive) (54 Points)

18 July 2016

Sir, I want to transfer 10L white money which I saved out of my salary over the past 6 years. I want to transfer money because income from salary and interest on FD when clubbed together resulting in huge tax payment. I want to transfer 10L to my brother so that he can open an FD on his name. My brother is unemployed. Will there be any tax on the Rs.10L if I transfer Money in my brother's account? He is my own brother.. Please advise. Regards, Krishna

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 18 July 2016

Transfer (by way of gift) to brother is not taxable in the hands of the your brother. Interest on FD after transfer would be taxable in the hands of your brother. But if such transfer can be revocable, then interest income is taxable in your hands only.

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krishna (executive) (54 Points)
Replied 18 July 2016

Thankyou for your reply, Madam. So, I can go ahead with your suggestion. Regards, Krishna

krishna (executive) (54 Points)
Replied 18 July 2016

Madam, I have one more question: My brother don't have a PAN card. Will he be eligible to apply for the card keeping in view of Transfer of 10L to his account so that TDS will be deducted @ 10% on interest earned out of FD? otherwise, the bank may deduct 20% tds. As my brother is unemployed, is he eligible to apply for PAN card? THanks in advance, kittu

krishna (executive) (54 Points)
Replied 18 July 2016

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 18 July 2016

No link between unemployment and PAN card. Your brother can apply for PAN card to avail 10% TDS benefit. Further, if there is PAN, then 15G/15H can be submitted to the bank for no deduction of tax provided income does not exceed exemption limit.

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