KVP issue

Tax queries 843 views 2 replies

amit

CEO

35 Points Joined April 2010

hi! guys!

I have a KVP of Rs.2,00,000/- incepted on 03/11/2001 gifted by my father to me. The maturity time should be in Feb 2009 probably.

Now, i am paying personal income tax since last two years but failed to show in my returns. I wish to show it in my next incoming tax return file.

What is the tax amount am i liable to pay on the interest gained? I think i have to pay tax on interest gainded from the time i have started filing return as before that i was non earning. Am i also liable for a penalty? if, yes how much?

Also, i have not yet encashed the KVP though it has matured. Do i earn any interest gains any further? if yes, how much?

Can the KVP be gifted by me further to my wife for tax benefits? if no, then what do i do next for tax benefits.

Amit

Replies (2)

Amir

Learner

4016 Points Joined December 2009

Dear Sir,

Interest on KVP's can be offered to tax either on due/accrual basis or on receipt basis at the option of the tax payer.

So if ur Father and U have not shown any interest income earlier then entire interest shall be taxable in the year of maturity.

No penaly would be levid since there is an option to offer it to tax on maturity i:e receipt basis.

No tax benefit can be availed by gifting it to your wife, but you can do that by gifting it to ur major child (and if he/she is not having taxable income)