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Posted: 20-01-2011

17 Jan, 2011, 04.24AM IST, Sudhir Kaushik,
How parents can bring down your tax liability

Your parents can help bring down your tax liability in several ways. Here are four smart strategies that can reduce your tax outgo.

1. Invest in their name if they are in a lower tax bracket

Every adult enjoys a basic tax exemption limit. For senior citizens (above 65 years), the basic exemption limit is Rs 2.4 lakh a year. If any or both of your parents do not have a high income but you have an investible surplus, you can avoid tax by transferring money to them which can then be invested in their name.

There is no tax on such gifts and the income from the investments will be treated as theirs. There are plenty of options. The Senior Citizen
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