Union Budget 2025: Want to reduce TDS on FD? This is how legal heir clause & Form 15G can help you!

Budget 2025: Understand the key differences between a nominee and a legal heir and learn how Form 15G can help you save tax on Fixed Deposits by utilising your spouse’s name strategically.  

ZeeBiz WebTeam | Feb 01, 2025, 06:00 PM IST

With Finance Minister Nirmala Sitharaman set to present the Union Budget 2025 on Saturday, February 1—her eighth consecutive budget—taxpayers are actively seeking ways to boost savings. Fixed Deposits (FDs) continue to be a popular and secure investment choice, but tax deductions can impact overall returns.

To minimise Tax Deducted at Source (TDS) on FD earnings, it’s crucial to understand the difference between a nominee and a legal heir, along with the strategic use of Form 15G. By leveraging these insights, you can enhance your FD investments while ensuring tax efficiency. Here's how.

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Introduction to Fixed Deposits (FDs)

Introduction to Fixed Deposits (FDs)

Fixed Deposits remain a preferred choice for guaranteed returns and financial security, despite other investment options.

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Guaranteed returns with FDs

Guaranteed returns with FDs

FDs offer guaranteed returns, making them a reliable addition to any investment portfolio.

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Flexible tenure options

Flexible tenure options

With a variety of tenures available, FDs cater to diverse financial needs and goals.

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Tax benefits with form 15G

Tax benefits with form 15G

Filing Form 15G helps avoid TDS deductions on interest if your spouse’s income is below the taxable limit.

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​Reduce TDS liability using spouse’s name

​Reduce TDS liability using spouse’s name

Opening an FD in your spouse’s name can help lower your TDS liability if you fall within the taxable income bracket.

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Understanding legal heir eligibility

Understanding legal heir eligibility

Legal heirs, such as spouses, children, and parents, are entitled to inherit assets based on inheritance laws.

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Role of nominee: Not the same as legal heir

Role of nominee: Not the same as legal heir

A nominee is simply a custodian of the assets but does not automatically inherit them like a legal heir.

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Asset distribution without a will

Asset distribution without a will

In the absence of a will, assets are distributed as per succession laws, prioritising legal heirs.

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Legal heir rights: Inheritance & claim

Legal heir rights: Inheritance & claim

Legal heirs have a rightful claim to inherit a deceased's assets, regardless of the nominee’s designation.

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Nominee vs legal heir in asset distribution

Nominee vs legal heir in asset distribution

Nominee vs Legal Heir in Asset Distribution

While the nominee manages assets temporarily, only legal heirs have the rightful claim to inheritance.

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