InvestorQ : Can we save tax by making investments in parents name?
Purvesh made post

Can we save tax by making investments in parents name?

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1 year ago

Saving tax through investment in your parent's name is a good idea. You must primarily invest in a way that your tax burden shifts to our family members and you can take the benefit of Income Tax slabs. Through investing in a planned manner you will not only save tax, but also earn higher returns on your investment. However, you must be aware of some restrictions in each of the clause.

Here's how you can save tax through investment in the name of parents;
Section 80 C and Section 80 D of Income Tax Act, give investment in an approved savings tool which can be used for income tax deduction.

You can also start investing in PPF, life insurance, and health insurance in your parents' name for tax deduction. Your contribution to PPF or Senior Citizens Savings Scheme (SCSS) in the name of your parents is eligible to earn tax-free returns.
I have read an interesting answer on what is the Senior Citizens Savings Scheme, I would like to share the link:

Investment in an asset and giving that asset to your parents as a gift or as a loan can also serve the purpose of tax saving. You will be free from paying tax if you transfer your asset to your parents.

Under section 64, the Income Tax Act, an individual can club any of his/her income generated through assets and investment. Provided That the asset must be purchased in the name of close relatives (spouse, minor child or daughter-in-law) only.

user profile image
1 year ago