HRA, home loan interest deduction provisions are independent of each other

Font Size

Print

Feedback

Email

Discuss

Related Articles

‘People still prefer piracy to paying for world ci...

: In one of your Q&As you stated that a PPF account after maturity can be extended for any number of block periods - there is no limit on how many times you can extend the account. My banker has stated that only two extensions are permitted and therefore I will have to withdraw the amount on April 1, 2010. However, I am interested in continuing with the PPF account with a yearly contribution. Please let me know the notification/circular allowing extension of the block period without any time limit so that I may show the same to my banker. Your early response will be greatly appreciated.

—MP Gajaria

The note under Sec 9(3) of the PPF Scheme, 1968 states, "A subscriber may at his option (to be exercised before the expiry of the first year of every extended block period) avail of this facility for a further block of 5 years on expiry of 20 years or on expiry of 25 years and so on, from the end of the year in which the initial subscription was made."

Unfortunately, many of the accounts offices miss the words, 'and so on.', and therefore feel that the account is required to be closed on expiry of 25 years.

I have three grand children - age 16 years, 8 years and 3 years. Can I open a PPF a/c in their name? If yes, then how much contribution can I make in each a/c. I do not mind investing Rs 70,000 in each a/c from my capital. I do not wish to claim any tax deduction for that investment since I am also contributing Rs 70,000 in my own PPF a/c. The amount of Rs 2,10,000 contributed by me to my grand children PPF a/c has no impact on my income except my capital will go down by that amount. Will this transfer of Rs 70,000 be considered as gift from me to them and will they come under gift tax? Lastly, can I make a direct payment to their respective PPF a/c or do I have to first open a bank a/c in their name, deposit the amount [Rs 70,000] in their a/c and then write a cheque from their bank a/c.

—Sanat Kapadia

Yes, you can open an account in their names but there is an insurmountable difficulty.