Tax liability for nominee of PPF diseased account

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A PPF nominee received Rs 55 lakh after the account holder's death. The nominee inquired about tax liability on receiving the amount and if transferring it to their mother (the legal heir) would incur tax. Experts advised that the inheritance is tax-exempt under Section 56(2)(x)(c)(III) of the IT Act. To transfer, a gift deed with bank transfer is recommended, with no tax liability for either party. The nominee should declare the amount under 'exempt income' and keep the death certificate and PPF passbook as proof.

kishore K

kishore K (Querist)
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05 September 2021 Dear Experts

I was the nominee of PPF account of my maternal uncle (Mother's real Brother) who was a bachelor. I received a sum of 55 lac after his death last month. I have 2 queries in that regard, need your advise please.

1. Tax liability on me on the amount received.
2. If I transfer the amount to my mother's account ( I believe she is a default legal heir), Tax liability on her.

Kindly help.

Thanks !!
Iyer

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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05 September 2021 1. Nil
2. Better to make Gift deed between you (as Donor) and your mother for the same amount, with Bank transfer. No tax liability over anyone.

kishore K

kishore K (Querist)
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07 September 2021 Thank you sir for the guidance, appreciate your help.
As a nominee, do I have to show this in the exempt income under inheritance.
And if there is any query from assessing officer, will I be required to prove the relationship as well, could you please guide on these well. Thank you so much for your time.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 September 2021 1. Yes declare it under 'Exempt Income.' It is exempt u/s. 56(2)(x)(c)(III) of IT act.
2. Just keep the death certificate and pass book of the PPF account declaring yourself as nominee; as proof.

kishore K

kishore K (Querist)
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19 September 2021 Thanks a lot sir for the guidance !!

Regards
Iyer

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 September 2021 Most Welcome..

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