5. FD Income Will Be Clubbed With Yours

Don’t think that the oldest trick can help you to escape the tax that is investing in the name of your spouse or children. It’s true that you won’t have to pay tax on the money given to your spouse or child, but if the money is invested, the gained income will added to the income of the money provider and will be taxed accordingly. So if you invest in FD in your spouse’s name, then the interest earned will be treated as your income.

The rules are somewhat different in case of investments in the name of minor children that is below 18 years. The interest earned will be treated as the income of the parent whose income is more. However, there is an freedom of 1,500 a year per child for a maximum of two children.