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Partial withdrawal from ppf

dheeraj (EXEC) (32 Points)

18 October 2016

Hi I did a partial withdrawal from my ppf account this August 2016 by error I withdrew excess than I needed, if I redeposit say 50% of that amount back in ppf account this FY can I claim the same in ta. Rebate

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10 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 18 October 2016

under 80C yes its eligible, deposit means fresh subscripttion out of taxable income, so it is available

dheeraj (EXEC) (32 Points)
Replied 18 October 2016

Originally posted by : U S Sharma

under 80C yes its eligible,
deposit means fresh subscriptttion out of taxable income, so it is available

thanks sharma ji, actually i am jobless , and have no other source of incomr so what i withdrew i am putting back hope that qualifies as fresh investment

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 19 October 2016

Hello

If your income is Zero then how you can claim tax rebate/deductions.. ????

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 19 October 2016

Section 88 of the Income Tax Act requires that the contributions to PPF should be made out of the assessee’s total income which is chargeable to tax. As a matter of fact the amount withdrawn from PPF is not the income; therefore in case the same amount which was withdrawn from PPF is redeposited in the PPF account, the legal requirements will not be satisfied. However, this problem can be overcome by first contributing to PPF and then making withdrawal. Alternatively the deposit in PPF can be planned from income and the amount withdrawn from PPF account may be used for expenses or making investments..

dheeraj (EXEC) (32 Points)
Replied 19 October 2016

hi vishal i have sold my house due to financial problems , as per calculation the taxable short term capital gains come to around 9 lacs since i am not in a position to buy a new house so taxabl.

btw how is the income tax calculated for example will i have to pay tax on 9 lacs or 5 -9 =4 lacs x 20℅ i.e amount exceding 5 lacs

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 19 October 2016

Hello Dheeraj

If a property is sold within three years of buying it, it is treated as a short-term capital gain. This is added to the total income and taxed according to the slab rate.

STCG = Total Sale Price – Cost of acquisition – expenses directly related to sale – cost of improvements.

dheeraj (EXEC) (32 Points)
Replied 19 October 2016

hi vishal, actually my case is very completed as below

1) ansecstral property sold and capital gains invested in new property

2) however new property also sold within 3 years

so i am very confused in calculating my tax liability as i heard that ltcg will be revesed.

can provide you exact figures and years of purchase if you can help me out.

Secondly, new property cost of acquisition/ is developmemt fee, maitainence,clubhouse excluded or included along with agreement value stamp duty reg chgs

thank u

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 21 October 2016

deposit is done, now if no more taxable income is available to set off, its just ok, coz 80C is a tool to reduce the tax liabilty just

Icarus Patel (25 Points)
Replied 21 October 2016

sharmaji should i deduct amount from advance tax and then pay advance tax or claim it in refund while filing ITR next year

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 23 October 2016

Originally posted by : Icarus Patel
	sharmaji should i deduct amount from advance tax and then pay advance tax or claim it in refund while filing ITR next year

any deposit under PPF is available for claim under section 80C, and yes advance tax is also reduced if the deposit is done before the advance tax date.