The transfer of FD or its proceeds will not be taxable for wife of the deceased.
Is there a way to transfer Canara Bank's FD to wife, who is also the nominee, after Husband's death without paying tax? The wife is the nominee but does not have a joint account with the deceased. We are looking for options to transfer the FD to the wife without dissolving it, so it is not shown as income just FD transfer to spouse or legal heir after death. Thank You.
Dear Sir,
Hope you are doing well !!
There will be no tax liability on said transfer.
It is advisable to take a phone consultation for detailed discussion.
- The amount payable or paid to the legal heir or nominee of the deceased is not taxable under Income Tax laws in India. It is treated as capital receipt in the hands of legal heir or nominee. As wife is nominee, FD is payable to her only. You can renew the same FD in the same bank or make new FD in other bank. Interest from FD will be taxable in your hands post transfer of FD in your name. Don't forget to show FD amount in your ITR.
- Please check whether there is any income taxable in the hands of deceased. Ensure to file ITR of the deceased and apply for surrender of PAN. You can also cross-check the income from Form 26AS.