I bought some fund units jointly with my wife. I am the primary holder and my wife is a secondary holder. She does not earn any income. The Annual Information Report is being sent for PAN numbers of both primary and secondary account. Income tax officials have been asking for explanation for these funds in AIR with secondary holder. What should I do?
Koya rao
Mutual funds have to file an Annual Information Report (AIR) with Income Tax authority for transactions exceeding Rs 2 lakh, each year. This is done to detect tax evasion. In case authorities find mismatch in IT Return and AIR information, the investor is held accountable.
If you bought mutual fund units jointly, the second holder should inform the tax authority that she is only a joint second holder for operating mutual funds, and the investment was fully funded by the primary holder.
This article was originally published on October 17, 2013.
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