BS Rangi (President) 01 June 2021

Joint account in bank two or three persons

Sir,

I had requested for opinion on opening joint account by 4 individuals in a bank without registering society or making an NGO etc. Based on learned comments /views I received from this learned forum ,the bank obliged and said ,we can open account,but give us in writing PURPOSE of this acct. I wrote that it is meant to help the needy.

Now a member raised an issue as advised by his CA that money received in this joint acct through cheques, a pure white money will again be taxed in our hands and will be charged under heavy slab of more than 30 %. After money is received from a donor by cheque it is further dished out to the beneficiary /the needy. Money does not stay and earn any interest . How can this money be taxed second time ? PLease advise .

Rgds,

BS Rangi

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3 Replies

Dr J C Vashista (Advocate) 01 June 2021

The income received in such an account is liable to be taxed as per Income Tax Act, 1961.

It is better to consult a local prudent chartered accountant / taxation lawyer for appreciation of facts / documents and professional advise .

Sankaranarayanan (Advocate) 01 June 2021

Better to form a trust and do the service and help to needy people and file a application with income tax department under 80G and 12AA then only the amount be exempted from the income tax. Its all subject to public charitable activities for which you consult a local CA or lawyer who expertise in income tax

T. Kalaiselvan, Advocate (Advocate) 03 June 2021

This will be treated as income from other sources in the hands of the receiver of this amount.

Hence it is liable to attract income tax.

You may therefore better open an account in the name of a welfare association so that proper accounting system and transparency also, would be there for all future audit and other issues.