Skip to main content

House Renting Guide: Important Things to Check Before Finalizing a Rental Home

Post a Comment

Open an FD in Your Parents’ Name and Get Double Benefits – Here’s How

 If you are planning to open a Fixed Deposit (FD), wait a moment! Did you know that by opening an FD in your parents’ name, you can get double benefits? This strategy can help reduce your tax liability and earn you a higher interest rate. In this article, we will explain in detail how you can maximize your benefits by opening an FD in your parents' name.

1. Save Tax on FD – Avoid TDS Deduction

Interest earned on FD is taxable. If a person’s annual interest income exceeds a certain limit, Tax Deducted at Source (TDS) is applied.

New TDS Deduction Limits:

  • For regular citizens: ₹40,000
  • For senior citizens (60 years and above): ₹1,00,000

If your FD generates an annual interest income of more than ₹50,000, TDS will be deducted. However, if you open an FD in your parents’ name and they are senior citizens, they can earn up to ₹1,00,000 in interest without any TDS deduction.

How Can You Save Tax?

If you open an FD in your name and earn over ₹50,000 in interest, the bank will deduct 10% TDS. However, if the FD is in your parents’ name (who are 60 years or older), their interest income will be tax-free up to ₹1,00,000.

Conclusion: Opening an FD in your parents' name helps you avoid TDS deductions and reduces tax liability.

2. Higher Interest Rates for Senior Citizens

Banks offer higher interest rates to senior citizens compared to regular customers.

Interest Rate Difference:

  • Regular FD rate: 6% – 7%
  • Senior Citizen FD rate: 6.5% – 7.5%

Most banks offer senior citizens 0.50% to 0.75% higher interest on FDs. This means if you open an FD in your parents’ name, you will earn more interest.

Example:

If a bank offers 7% interest on a regular FD and 7.5% interest for senior citizens, opening an FD in your parents’ name will give you an extra 0.50% interest.

Conclusion: You can earn higher interest by opening an FD in your parents’ name.

3. Joint (Shared) FD – Even More Benefits

You can also opt for a Joint FD with your parents. There are two options:

  1. Either or Survivor FD: Either account holder can operate the FD.
  2. Senior Citizen as Primary Holder: If your parent is the primary account holder, you can enjoy higher interest rates.

Conclusion: A joint FD provides additional security and allows you to benefit from senior citizen interest rates.

4. Gift Money to Parents for Tax-Free Income

If you gift a lump sum amount to your parents and they invest it in an FD, they won’t have to pay tax on it.

Gift Tax Rules:

  • Any amount gifted to parents is tax-free.
  • Interest income from the FD will be added to their taxable income.

How Is This Beneficial?

If your parents' total annual income remains below the taxable limit, they won’t have to pay any income tax. This ensures tax-free earnings from the FD.

Conclusion: Gifting money to parents and investing in FD helps save tax and earn higher interest.

5. Long-Term Financial Security for Parents

Opening an FD in your parents’ name not only saves tax but also provides them with financial security.

Benefits:

  • Retirement Planning: A secure investment option for parents.
  • Regular Income: Interest can provide them with a stable income source.
  • Emergency Fund: The FD can be broken in case of urgent financial needs.

Conclusion: An FD is a great way to ensure financial security for your parents.

Final Thoughts – How to Get Double Benefits?

  1. TDS Savings: Senior citizens can earn up to ₹1,00,000 interest without TDS.
  2. Higher Interest Rates: Senior citizens get a higher interest rate on FDs.
  3. Joint FD Advantage: Having a parent as the primary holder helps earn more interest.
  4. Gift Tax Savings: Gifting money to parents and investing in FD ensures tax-free earnings.
  5. Financial Security: It provides a stable income and financial safety for parents.

If you’re considering opening an FD, use this double-benefit strategy by investing in your parents’ name to maximize savings and earnings.

So, don’t wait! Make a smart financial decision for your parents and enjoy greater benefits.

Comments

Post a Comment

Popular posts from this blog

Muneeb Shafi: The Young Author Making Waves in Literature

Muneeb Shafi, a rising literary talent from South Kashmir's Shopian district, is making headlines for his remarkable achievements at a remarkably young age. Despite being an undergraduate student at Guru Kashi University in Talwandi, Punjab, Muneeb has penned numerous books, novels, articles, and pamphlets, showcasing a rare literary prowess. Not confined to writing alone, he is also a proficient calligrapher, adding another dimension to his artistic abilities. The young author's contributions to the literature field have been substantial and noteworthy. His notable work includes a book titled 'Journey from 10 to Nineteen,' focusing on the complexities of adolescence. This book has garnered attention and acclaim, propelling Muneeb Shafi, also known as 'Munna Michael,' into the limelight. Born on July 15, 2004, in Shopian, Muneeb Shafi, at just 18 years old in 2022, displays a maturity and talent beyond his years. Standing at 162cm with a weight of 60kg, he prese...
Post a Comment
Read more

Avdhesh Rajawat: The Breakthrough Entrepreneur Revolutionizing Lives with Success Preneur

In today's fast-paced and ever-evolving digital world, the demand for individuals with strong digital skills and entrepreneurial mindset is skyrocketing. Avdhesh Rajawat, widely known as Avi, has emerged as a prominent figure in the realm of entrepreneurship and digital skill development. With his passion for empowering others, Avi has made a significant impact on the lives of over 300 individuals, helping them acquire essential digital skills and providing opportunities to earn money online. This article sheds light on Avi's journey, his work, and his commitment to fostering digital empowerment. Early Life and Education: Born in Sawai Madhopur, Avi hails from the vibrant city of Kota, Rajasthan. His educational journey began at Vidhyanjali Academy, a reputable CBSE school in Kota, where he completed his 12th grade. Avi's strong foundation in academics laid the groundwork for his future entrepreneurial endeavors. Entrepreneurial Journey: Avi began his entrepreneurial journe...
2 comments
Read more

Supreme Court's Landmark Decision: Can a Tenant Become the Owner After 20 Years? Here's the Full Truth

Today, many people are earning extra income by renting out their properties. For some, it’s a side business; for others, a full-fledged investment strategy. But the real question is—how secure is your property when it’s rented out for a long period? A commonly asked question is: If a tenant lives in a rented house for 20 years, can they claim ownership of that property? The Supreme Court of India has now provided a clear and final answer to this question. This ruling is extremely important for both landlords and tenants. What is 'Adverse Possession'? In Indian property law, there is a concept called Adverse Possession . This rule is part of the Transfer of Property Act and the Limitation Act of 1963. According to this rule, if a person stays in continuous and uninterrupted possession of a property for 12 years (in the case of private property) or 30 years (in the case of government property), and the actual owner does not challenge it legally, the person can claim ownershi...
Post a Comment
Read more