Fixed Deposit Transactions for Business Partner - Minor-Guardian

[Former Member]

Hello,

We are implementing Fixed Deposit Accounting in Money Market through Treasury & Risk Management.

I need some understanding on

1) How Fixed Deposits from MINOR has to be treated. I have created a MINOR as a Business Partner and a Guardian as a BP and a Customer and have related the Minor BP to the Guardian BP. Legally, a Minor cannot enter into a contract. As per my understanding, in this case, the FD has to be created with the Guardian BP. Is this correct?

2) Will SAP allow creation of FD with a Minor?

The Guardian has been assigned the role of Counterparty and the Minor has been assigned the role of Beneficiary.

Request your views on the above with further documetation, if any.

Regards,

Murtuza.

+91 99232 05169.

[Former Member]

Hi,

I am having certain questions from a business context.

When you take a fixed deposit in the name of Minor, I think the guardian is the one who will be doing the transactions but the deposit will be in the name of the minor.

In that case, create the minor as a counterparty and create the fixed deposit in Minor's name and assign the guardian as an alternative payer/payee. The guardian should be assigned as alternate payer in the standing instructions. All transactions for this FD will be dealt with the guardian but the FD will be in the name of the Minor.

Regards,

Ravi

[Former Member]

Thanks for your reply Ravi,

However, i have another question about the impact of TDS. If the Payee is the Guardian, then the interest payments for the Minor's FD will be made to the Guardian and TDS deducted therefrom. In such a situation, the Minor would not be issued a TDS certificate. But the clients requirement is to issue TDS certificate in the Minor's name.

Also will the Guardian's TDS certificate show a relation to the interest income received on behalf of the Minor and TDS deducted therefrom?

Please let me know your views.

Regards,

Murtuza.