Understand difference between nominee & legal heir; form 15G-related technicalities that can help you save big using a non-working family member
Discover how to maximize your Fixed Deposit benefits while minimizing tax liabilities. Learn about using your spouse's name for FDs and the importance of Forms 15G and 15H.
Fixed Deposits (FDs) remain a popular choice for investors seeking guaranteed returns. Despite the availability of various investment options, FDs are often recommended by experts for portfolio diversification. However, understanding the tax implications associated with FDs, especially for tenures under five years, is crucial. By leveraging your spouse's name for opening an FD, you can potentially save on Tax Deducted at Source (TDS). This guide explores how to maximize your benefits while minimizing tax liabilities.
Nominee
A nominee acts as a trustee of the assets for the account holder after their demise.
Ownership Status
The nominee is not the legal owner of the assets unless specified in a will.
Nominee's Responsibilities
The nominee is responsible for managing the assets temporarily until the legal heirs are determined.
Who Can Be a Nominee?
A nominee can be anyone, including a spouse, friend, or relative.
Legal Heir Definition
A legal heir is recognized as the rightful owner of the deceased's assets under succession laws.
Legal Heir Eligibility
Common legal heirs include a spouse, children, and parents, based on inheritance laws.
Nominee Is Not a Legal Heir
The nominee does not automatically inherit the assets and is not necessarily a legal heir.
Distribution Without a Will
In the absence of a will, assets are distributed according to succession laws, favoring legal heirs.
Legal Heir Rights
Legal heirs have the legal right to claim and inherit the deceased’s assets, overriding the nominee’s role.
Nominee vs. Legal Heir in Practice
While the nominee manages the assets, only the legal heirs have the right to inheritance, making their role crucial in asset distribution.