P.p.f maturity (Income Tax)

This query is : Resolved

Author : Anonymous

( Author )
14 July 2012

A SIMPLE UNREALSTIC EXAMPLE TO UNDERSTAND MY QUERY
LET SAY MY INCOME FROM SALARY IS RS.10 P.A FIXED N I.E IS MY GROSS TAXABLE INCOME AND I DEPOSIT RS. 2 PER YEAR IN P.P.F MATURITY AFTER 5 YERAS SO FOR ALL THE 5 YEARS MY GTI WILL BE 10 & NTI WILL BE 8(AFTER DEDUDCTING RS.2 PPF CONTRIBUTION)DAN AFTER 5 YEARS I RECEIVD RS 15 FROM PPF (RS 10 PRIN+5 INTERSET)DAN WAT WILL BE TAX CALCULATIONS IN 5TH YAER IN THE YEAR OF MATURITY?PLS RPL SOON

CA SANJAY MUKHERJEE

( Expert )
14 July 2012

Till date both Interest and principal from PPF are tax free, so there would be no tax on the Rs. 15 in your example.

Author : Anonymous

( Author )
15 July 2012

R u sure?bcz i think both r taxable......

CA SANJAY MUKHERJEE

( Expert )
16 July 2012

Till date both interest and accumulated amount in PPF A/C is tax free, moreover the matured sum will not be taxable under Wealth Tax.For income tax look at Section 10 (11).

Please share the source from where you got the idea that both interest and principal of the maturity amount of is taxable.

There was a proposal to Tax the maturity amount in PF ( not only PPF ) under proposed DTC under EET scheme. However, Direct Tax Code is not yet implemented.

Author : Anonymous

( Author )
18 July 2012

I went for google search and there was one link in search results in which both ppf amount and interest were shown as taxable.

CA SANJAY MUKHERJEE

( Expert )
18 July 2012

Please share the link.

CA SANJAY MUKHERJEE

( Expert )
18 July 2012

Moreover, please look at Section 10(11) of IT Act as I have mentioned earlier. Hope this will help you to be sure that both interest and principal amount are tax free.

Author : Anonymous

( Author )
18 July 2012

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