Can an NRI claim benefits under Section 80C ?

My son is 21 years outdated and depends on me financially. He’s finding out in Australia since 2019 and thus is an NRI (Non Resident Indian). He holds a financial savings checking account in India. He additionally has a PNA. I perceive that NRIs can’t avail profit beneath part 80C for tax financial savings. I want to switch a part of my earnings to his checking account to make investments in his title and scale back my taxable earnings and tax outgo. What are the avenues accessible for him to have zero tax legal responsibility and on the identical time I’m additionally in a position to scale back my tax outgo to the utmost by him?

No. Your understanding about eligibility of NRI to assert deductions beneath Part 80 C isn’t absolutely appropriate. An NRI is eligible to assert full deduction beneath Part 80 C upto Rs. 1.50 lakh yearly however there are restrictions as to the merchandise by which an NRI can make investments to assert this deduction. So an NRI isn’t entitled to open a PPF account in addition to he can’t put money into NSC, Senior Citizen scheme and publish workplace month-to-month schemes. So aside from these restrictions, your son can put money into many different tax saving avenues accessible beneath Part 80 C like ELSS, ULIPs, cost of life insurance coverage premium, tax saving FD, reimbursement of dwelling mortgage and many others.

You may reward any sum to your son which can neither entice any tax legal responsibility for any of you as relationship of father and son is roofed beneath the class for specified kin for making the presents exterior the scope of taxation. It should additionally not entice any clubbing provisions. He can save tax by availing the essential exemption of Rs. 2.50 lakhs in addition to by making investments in any product like ELSS of Rs. 1.50 lakhs in a yr. Please observe that simply by transferring earnings out of your account to the checking account of your son, you won’t be able to scale back the tax which you might be in any other case liable to pay on such earnings. Nonetheless, any earnings arising on cash so transferred shall be included in his earnings and taxed in his arms.

Balwant Jain is a tax and funding skilled and will be reached on jainbalwant@gmail and @jainbalwant on Twitter.com.

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