Tax Planning for your Children

How to create Wealth... not taught in schools, it  involves numerous factors. One important factor is Tax Planning. Unless you yourself know the niceties, no professional can do tax planning for you as efficiently and effectively as you can do it for your ownself...

Penny saved is Penny earned...

Here are few tips for effective Tax Planning for your Children  ..... Read on....

Three types of Children Tax Planning to be done :-. 

(a) - For Married children -  Plan for creating a separate income-tax file for your daughter in law if not already done.  Avoiding transactions which cause clubbing of income.   - Create a new HUF file for your married children so that a new tax entity can be created.

(b) - For major unmarried children.      -Take education loan    If the Income-tax file is not yet created of major unmarried children who are students, think of creating a separate Income-tax File through gift.  No clubbing of income will arise. 

(c ) -  For minor children -Plan right now some funds for your minor children so that growth is high, tax is nil for long term perspective.     .   -The income of the minor child is clubbed with the income of the parents and only a deduction up to Rs. 1500 per annum is available.

Hence, if you make a gift to your minor child, make the investment in such a manner that the income does not become taxable in the hands of the parents.  Think of buying Mutual Fund and Direct investment in the name of the minor child  in the stock Market so that at least after one year the income received becomes tax free.

Also think of creating a Special Hundred Percent Welfare Trust for the minor child so that the income-tax file of your minor child can be started without attracting the clubbing provisions. 

www.rajivfcs.weebly.com

Rajiv Kapoor FCS
9839034761
rajivfcs@gmail.com