DMoss (Coordinator) 21 November 2013
Kumar Doab (FIN) 21 November 2013
Mr. Sudhir Kumar is right.
Kindly elaborate the matter. Thus the members/experts shall have better feel of the query and response can be quick and specific.
It is guessed that:
>> The Bank has released the funds in the a/c of the deceased.
>> If the released funds are kept in FD of another depositor say: Son of the deceased, then the funds shall be subjected to tax treatment as per prevailing rules in the hands of current holder of the funds that is earning interest.
>> If the funds are in the name of deceased depositor then the following guidelines issued by RBI may be looked into
Master Circular on Customer Service
20.4 Treatment of flows in the name of the deceased depositor
20.5 Interest payable on the deposit account of deceased depositor
These guidelines and others should be displayed in the bank, maintained at website of the bank and a printed version should be provided to the customer.
DMoss (Coordinator) 21 November 2013
Thank you Mr. Kumar Doab for taking the time to reply. I apologise to you and Mr. Sudhir Kumar for the style of my query. I felt I was making it easy for the reader by being concise! I was mistaken.
You guessed quite rightly Mr. Kumar Doab. The bank has released the funds of the deceased and the son has put the amount into a FD. It is not clear to me from your reply if the whole amount is taxed or the interest only. Would this come in the catagory of 'gift'?
vishak (manager) 22 November 2013
The gift is not taxable in case as section 56(2)V not applicable in exceptional cases which cover below :
Under a will or by way of inheritance us
Kumar Doab (FIN) 22 November 2013
Mr. Vishak has rightly adviced.
Income-tax Act: Sec 56(2) (v) (c)
Exemption can be availed if the money is received from a relative, which includes among others, any lineal ascendant or descendant of the individual.
Thus the money received by you from your father shall not be taxable.
The interest earned on the money in the bank account shall be taxable in your hands as per the income-tax slab rate in which you fall.
However you may consult a lawyer for the documentation with respect to the transaction.
And distribution to your uncle if the uncle is a beneficiary along with you.
The documentation for sending the money abroad can also be advised by your lawyer.
R RAJAGOPALAN (ADVOCATE) 24 November 2013
2. is he permitted to send money abroad?
REPLY: 1. During the period between the demise of the Father, and the release of the FD: The Legal Heirs will be taxed in respect of his/her respective share in the interest for that period.
2.The other legal heirs have 'gift'ed their respective shares in the principal amount of the FD, to the son living abroad. If the donors are lineal ascendants/brother/sister of the donee, he will not be taxed in respect of the 'gift's. His own share in the FD, inherited by law, is not taxable 'income' in his hands.
2. There is no reason why he should not be permitted to remit the money abroad; however he may contact his local Bank/ RBI, in this regard.
DMoss (Coordinator) 26 November 2013
Thank you once again gentlemen for your kind replies!
It seems that some documents are needed from the bank where the demised father had the account for tax purposes. The bank gave just a check. What document would I need from the bank?
The CA is out of the country so will have to wait for his return to get his advice.
R RAJAGOPALAN (ADVOCATE) 26 November 2013
YOUR QUERY: "It seems that some documents are needed from the bank where the demised father had the account for tax purposes. The bank gave just a check. What document would I need from the bank? "
REPLY: You may require from the Bank,
1. Interest Certificate;
2. T.D.S Certificate, &
3. A copy of the Account.
Kumar Doab (FIN) 26 November 2013
Try to obtain copy of a/c opening form, nomination form and nomination registration slip and nomination endorsement in account and pass book as well.