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SC Vasudeva
Q. I am a PSPCL pensioner. My queries are as under:
(a) Whether PPF account can be closed prematurely.
(b) Whether PPF account can be extended after its maturity. If yes, for how many years? - Ramesh Kumar
A. (a) The Public Provident Fund Scheme provides that a subscriber shall be allowed premature closure of his account on any of the following grounds:
(i) That the amount is required for the treatment of serious ailments or life threatening diseases of the account holder, spouse or dependent children or parents, on production of supporting documents from competent medical authority;
(ii) That the amount is required for higher education of the account holder or the minor account holder, on production of documents and fee bills in confirmation of admission in a recognised institute of higher education in India or abroad.
Such premature closure shall be allowed only after the account has completed five financial years. Further, such premature closure shall be subject to deduction of an amount which shall be equivalent to 1% less interest on the interest rates as applicable from time to time payable on the deposits held in the account from the date of opening of the account till the date of such premature closure.
(b) PPF account can be extended for any number of years. You can, therefore, extend the same after its maturity period of 15 years.
Q. I have a residential plot. I want to gift it to my daughters (married). Please guide whether the transaction will take place similarly as in the case of son. Is there any tax liability on my part or the receiver and whether any capital gain is involved if the receiver sells the plot?
(b) I am a pensioner from PSPCL (erstwhile PSEB) and also receiving family pension in respect of my deceased wife who was also a government servant. Whether a standard deduction of Rs 15,000 is permissible on the family pension or not? Please advise. - Dharam Paul Kalia
A. (a) You can gift the plot to your daughter. However, the formality of executing a gift deed and getting it registered with the Sub-Registrar would remain same as in the case of a gift to a son. This is because no immovable property, value of which exceeds Rs 100 can be transferred to another person without registration as provided under the Registration Act, 1908. Currently, it is possible to transfer the immovable property to a blood relation without payment of any stamp duty in Punjab. You can avail the benefit in accordance with the scheme introduced by the Punjab Government in respect of the gift of plot to your daughter. However, the aforesaid formalities regarding the registration will have to be complied with.
(b) Standard deduction in respect of family pension is allowable to the extent of 1/3rd of the pension amount or Rs 15,000 whichever is less.
Q. I (75), a resident of Ludhiana, had purchased a plot measuring 240 sq yds on 25-09-2000 for Rs 1,20,000 + stamp duty and other miscellaneous charges.
I have transferred this plot to my daughter who is an NRI (settled in New Zealand) by way of ‘Tabdil Malkiat Nama’ as per policy of the Punjab Govt. where there is concession/exemption in stamp duty. Ownership value is marked at Rs 12,72,000.
My daughter has a little interest income from FDR in her Indian account of SBI.
My daughter sold this plot on 09-07-2018 for Rs 12,00,000. Please advise about the tax liability on me and my daughter. Please also let me know whether I have to file income tax return.
Also let me know whether there is any short-term/long-term capital gain in the hands of my daughter. What will be her tax liability and when she should file IT return? - Satya Rani
A. The plot having been sold by your daughter, the return of income disclosing the profit on sale of plot of land will have to be filed. She would, therefore, have to file the return by 31st July 2019. It would be a case of long- term capital gain as the plot has been held for more than two years. The long-term capital gain would work out at Rs 8,64,000. The amount of capital gain has been computed without taking into account the fair market value of the plot as on 1.4.2001 as the plot was purchased in September 2000 and there may not be much difference between the cost and fair market value as on 1.4.2001. Further, the amount of stamp duty and other miscellaneous charges incurred by you have not been considered as the relevant details have not been given in the query. The amount of long-term capital gain would be taxable @20% plus cess of 4% thereon. The amount of tax on the said basis would work out at Rs 1,79,712. In case your daughter’s interest income is less than Rs 2,50,000, the amount of long-term capital gain to the extent of the difference between the interest income and Rs 2,50,000 would be reduced from the amount of capital gain and the balance amount of capital gain will be taxable at the aforesaid rate. For example, if the interest earned in NRO account is Rs 1,00,000, the amount of Rs 1,50,000 would be reduced from Rs 8,64,000 and the balance amount would be taxable @20.8%.
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