How can I fund IPO applications?
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I'm planning to use my parents' accounts for BHNI IPO bids to increase our family's allotment chances. Since they only have farm income and no ITRs, what’s the safest way to move money into their accounts for the bids? I want to ensure the paperwork is solid so it doesn't appear as unexplained income if the tax department ever asks.
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Using family accounts for IPO bids is fine only if the money truly belongs to them and can be verified. Since your parents have farm income but don’t have tax returns, you should:
- Move money to their bank account through official bank transfers — no cash, please.
- Keep a record of the transfer and have them sign a simple gift or loan declaration.
- Hold onto proof showing where the money came from in your account.
Just steer clear of informal transfers. Having proper documentation is very helpful if the tax department wants to know where the money came from.