7 easy tips to save taxes that you didn’t know
One of the best ways to save taxes is by gifting money to your major children. For instance, let’s assume you have Rs. 20,00,000 that you want to invest in a bank FD. What you need to remember is that this will generate an annual income of approximately Rs. 1,60,000 at an interest rate of around 8% per annum. This amount will be added to your salary income and would be taxable. Now, here’s something interesting you can do to save taxes. Let’s assume that you have two major children. You can gift this Rs. 20 lakhs to them by either dividing it equally among them or give to one of them. In this case, the Income Tax authorities will not consider any income, which results from investing this amount as your income. Hence, it would be taxable at your end. Moreover, after adding interest income from FD, if your children’s income is below the minimum exemption limit, they will also not have to pay any tax.If you are not comfortable gifting the money to your children, the other option you can think of is to provide an interest-free loan to them. Even in this case, if your children invest that money in FD, income generated will be considered their income and not yours. Therefore, you need not pay any taxes on that income. Please note that children must be major and you cannot gift money to your wife and avail this tax advantage. Thus, don’t stop investing by worrying about taxation from returns.
123 views • 9 slides