Investing in mother's name can lower tax outgo. But be wary of two things.

I fall in the highest tax bracket of 30 per cent. So, will it make sense to start the SIP in my mother's name, instead of mine, to minimise taxes? - Nikhil Saini

You can.

If your mother falls in a lower tax bracket or has no taxable income, investing in an SIP (systematic investment plan) in her name can be a smart move. It will minimise your tax outgo.

That said, there are a couple of risks associated with this strategy.

Risk of income clubbing

If your mother returns the invested money later, the tax authorities may view it as a form of income clubbing. This means the money gets added to your income, not hers, and is taxed accordingly.

In short, there's no escaping the taxman if your mother returns the invested money to you.

Risk of estate planning

Entrusting your mother (or father) to invest on your behalf also poses legal issues. Because, legally, the investment belongs to them. In case they pass away, your siblings can stake a claim to the investment.

This problem may arise even if you are the nominee, as inheritance laws typically treat siblings equally.

Also read: Tax harvesting can help you save tax.