A younger co-applicant can help raise your loan tenure

For a salaried person, the loan tenure is matched with the retirement age.

- SAIKAT NEOGI

WHILE MOST PEOPLE prefer joint holding of investments for convenience in succession planning, it can trigger duplicate reporting to the income tax department. Non-earning joint holders, particularly homemakers and senior citizens, are receiving notices for transactions they never initiated or funded.

Banks, mutual funds, and other financial institutions are required to report specified financial transactions (SFTs) such as high-value deposits (above ₹10 lakh) or mutual fund purchases, under the PAN of each joint holder, regardless of who actually funded the investment.

Mismatch in AIS This duplication creates a mismatch between the actual income reported in tax returns and the information reflected in Annual Information Statement (AIS), leading to increased chances of automated tax notices or verification queries being issued. The enhanced scrutiny has intensified due to technological advancements in tax administration systems. The implementation of Rule 114E(2) has created a systematic issue where high-value transactions are automatically flagged across all joint holders' profiles.

Despite submitting feedback on AIS clarifying their non-involvement, responses are often rejected by reporting entities citing mandatory compliance with Rule 114E(2). As more categories like high-value deposits, mutual fund purchases, securities transactions, and credit card payments are sent to AIS, joint names can raise questions unless records and AIS feedback are proactively used to explain real ownership.