My son won the Teen Voice awards, which included a cash award of Rs. 8,00,000. I have invested the …
My son won the Teen Voice awards, which included a cash award of Rs. 8,00,000. I have invested the funds in his FD, me being the primary account holder.
My question is, will I have to pay tax on the interest that accrues in this FD account?
The rule on this regard is as follows: ( I have assumed your son is a minor, if he is of age, there is no question of clubbing)
Income of minor child earned on account of manual work or income from the skill, knowledge, talent, experience, etc., of minor child will not be clubbed with the income of his/her parent.
Since your son has won the prize on account of his own skills and abilities, his income (Rs. 8 lakhs) should not be clubbed in your hands. And neither would the income from his FD would be clubbed in your hands since the same funds were deposited in such FD.
