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Deduction u/s 80 C for PPF interest

S M VAZE (TAX CONSULTANT) (26 Points)

19 September 2008

For claiming deduction u/s 80C for contribution to PPF/NSC etc there is no condition let down that the contribution should be out of assessee's Income Chargeable to tax. If so in my opinion amount of interest credited to assessee's PPF account should be eligible for deduction u/s 80C.Please provide you views on this.

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9 Replies

CA Gaurav Gupta (Practice) (307 Points)
Replied 20 September 2008

interest on ppf is totally exempt & does not qualify for deduction.

interest on NSC accrues early but deemed to be invested for first 5 years & qualifies for deduction u/s 80C. that means int. firesty will be added to GTI & then claims for deduction.

refer: GIRISH AHUJA's book

Devendra Goyal (Service) (24 Points)
Replied 20 September 2008

Dear Gaurav

You are absolutely correct.

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 20 September 2008

TO AVOID DISPUTES BETTER WITHDRAW FROM PPF (AS PERMISSIBLE) AND REINVEST

CA Gaurav Gupta (Practice) (307 Points)
Replied 20 September 2008

sampat sir

i think so we r not allowed to withdrew any amt from ppf up to a time.

DHARMENDER (PCC) (28 Points)
Replied 20 September 2008

Originally posted by :gaurav gupta
"	sampat sir i think so we r not allowed to withdrew any amt from ppf up to a time.	"

hello,

WE CONTRIBUTE PPF MAX RS 70000/- P.A AND THEIR INTEREST IS ALSO QUALIFIED FOR FIRST 5 YEAR (AS REINVESTED) OTHER THEN IT WILL BE FULLY TAXABLE.

CA Gaurav Gupta (Practice) (307 Points)
Replied 22 September 2008

dear dharmender

treatment given by u is 4 NSC not 4 ppf

Mahendra (Chartered Accountant) (53 Points)
Replied 21 October 2008

Originally posted by :S M VAZE

No u r wrong. Interest on PPF is fully exempt in the hands of receiver. So how can u claim a deduction u/s 80c of the amount which is already exempt. So no deduction ..

CA Mukul Mittal (CA in practice) (384 Points)
Replied 03 October 2011

guys,

interest earned in PPF a/c is fully exempt and one cannot withdraw the amount from PPF a/c till 7 years and even upto 50% only, and that too as a loan against your deposit. the whole amount can be withdrawn only after 15 years......

Rahul Suneja (CA-Final, CS-Exec) (215 Points)
Replied 04 October 2011

intrest for ppf u/s 80c is fully exempt from income tax but the intrest of NSC is in a sense is also exempted from tax since it is first added to income u/h other sources and then deducted from GTI.