Income tax savings through senior citizen parents

 

incometaxIn an interview to CNBC-TV18, Subash Lakhotia, Tax & Investment Consultant shared his reading and outlook on tax exemption limits for senior citizens.

Talking on the subject, he says since the basic income tax exemption for a 60-year plus and 80-year plus senior citizen is Rs 2.5 lakh and Rs 5 lakh respectively, it is a good idea for the tax payer to give away money to his/her parents and then parents make investments in their own name.

Here are a few questions he has answered:

Q: Senior citizens enjoy a higher basic tax exemption limit along with a higher rate of returns on savings. Would it make sense for big family investments to be made in the senior citizens’ name? I am referring to investments which are over and above the purview of 80C?

Q: What if the heirs start fighting for it afterwards?

Q: I am a professional who owns a property which is rented out. The property is in joint name of my wife and me. It is a freehold property with no loans. Can gifting this property to my wife reduce my tax liability?

Go here to read the answers.

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