Many people save tax through tax saving make investments in the name of their children. Is that a great idea? Are there some important things that they need to keep in mind while making tax saving investments in the name of their children?

Edited Highlights
0:45 Should you be making tax saving investments in the name of your children?

1:07 Many people make tax saving investments in the name of their children to provide for their future needs

1:25 Is it necessary to do it this way? What are the issues that may come up in the future?

1:33 For people making a last minute tax saving investment in the name of their children, what are the things to remember?

2:00 Anything construed as a transfer of income from the parents to the children is not acceptable under income tax regulations

2:07 Income tax authorities want to tax everything in your name

2:11 This is because primarily it is your income

2:18 Tax saving investments are long term in nature. By the time they mature, children may be adults by then

2:26 While investing one should keep this in mind

2:34 If provided by the scheme, these investments can be tax free for the children when they grow up

2:47 If you invest in PPF in the name of your child, your contribution, interest and maturity proceeds are all tax-exempt

2:54 If you invest in PPF in the name of your child, your contribution, interest and maturity proceeds are all tax-exempt

3:14 In case of tax-saving FD in the name of child, you will get tax deduction for your contribution

3:21 But Interest during the five year period will included as part of your income and taxed accordingly

3:48 Taxability of income from the tax saving investment made in the name of the child is important

5:01 If the tax saving investments mature when the child becomes a major, he or she would be entitled to take decisions about it