Tax on Interest on NCD purchased in Joint Names?

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  1. Shubhabrata Khan

    Shubhabrata Khan New Member

    My Father has invested Rs.4,00,00 in NCD two years back through demat account where 1st Holder is my Mother and My Father is the joint holder with the option of Annual Interest payment.

    The Interest is been deposited in the Joint Bank account of my Parents where the 1st Holder is my father and my mother is the joint holder. In case of NCD the income tax on interest is not been deducted at source.

    Kindly advice how the Income tax on the Interest pay-out to be shown in income tax return and who should pay the income tax in this case. Can my mother alone can show the interest income in income tax return so that the tax liability is less.
     
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    It depends on what information you have given at the time of purchasing the NCD's.

    If you have shared your father's PAN Card, your father would be deemed to be beneficial owner of interest and he will have to pay tax.

    However, in case you have shared your mother's PAN Card, the mother would be deemed to be beneficial owner of interest and he will have to pay tax.
     
  3. Shubhabrata Khan

    Shubhabrata Khan New Member

    Yes Sir. My Mother has the PAN card and Her Pan Card number has been shared during opening the Dmat Account. Thank you for the advice.
     
  4. gaurav_kumar

    gaurav_kumar Well-Known Member

    Ok Great

    Just intimate to the person/banker from whom these NCD's have been purchased that your mother is the beneficial owner of these investments.

    After doing so, the whole interest can be shown in the hands of your mother
     
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