Most savings instruments allow investment in the name of spouse, children or parents, but with some restrictions. It is common to open a fixed deposit or buy insurance in the name of spouse or minor children. One can even open a Public Provident Fund (PPF) account or buy stocks in the name of spouse or children. Many seem to think opening fixed deposits in their spouses name or minor child’s name will reduce their tax liability. Unfortunately this is not so. The tax man has laid specific rules with regard to taxation arising from income clubbing. This is a diverse area and has its own complexities and is termed as "Clubbing of Income".
