NRIs are not allowed to hold resident accounts

There is a specific form available for precisely such cases. This form has to be submitted specifying the corrections and attaching a copy of your PAN as is issued to you.

In one of your question-answer column, you have written that ?Once a PPF account is continued without contributions for one year the subscriber cannot change over to with-contributions extension (Notification F3(6)-PD/86 August 20, 1986)?. Whereas in another, you have opined that it is possible to revive the old PPF account by contributing Rs 500 with a penalty of Rs 50 by Notification GSR 768(E) dated Nov 15, 2002., per year. This fact is not known to many. They feel that very old discontinued accounts cannot be regularised. Again in your reply column, you have opined that dormant PPF accounts can be revived. Is it not contradiction in your opinions? I would like to know whether a PPF account continued without subscriptions for 2-3 years can be revived, that is can be converted to with-contribution account or not.

?Ranjana Bhatia

At its maturity, the account can be closed or it can be continued for a block of 5 years. This facility is available for a further block of 5 years on expiry of 20 years and yet another 5 years on expiry of 25 years and so on for any number of blocks – Yes, any number of blocks. The continuation can be with or without contribution. Once an account is continued without contributions for more than a year, the subscriber cannot opt to change over to continue the account with contributions. [Notification F.3(6)-PD/86 dt 20.8.86]. It is only the account with contributions which get discontinued and be regularised. If you do not contribute even the minimum Rs 500 per year to a PPF account during its term of 15 (actually 16) years, the account becomes discontinued. An account extended with contributions becomes discontinued under similar situations.

A discontinued account can be revived by making the contribution of Rs 500 and a penalty of Rs 50 per year of default. I strongly recommend you to keep it alive so that you will be entitled to make the partial withdrawals as and when needed.

I am a salaried employee. I have filed return for the FY05-06 taking the perk value on employer provided accommodation at the rate of 20%. In the new budget, the same has been reduced to 15%. Now, I want to revise my return. What is the procedure?

?Nadir

You have time till March 31, 2008 to file the revised return. There is no fee for filing such return. All you have to do is to mention on the return form that it is a revised return.

Can one set off a long term capital loss (say on sale of property or shares) against the long term capital gain in FMP?

?Rastogi

Yes, one can. Any taxable long-term capital gain can be set off against long-term capital loss.

I am an NRI for the last 8 or 9 years. It is only now that the bank seems to have woken up and is now telling me that being an NRI, I cannot be a joint holder in my wife?s resident account. I know that being a resident she cannot be a joint holder in my NRE account due to which she operates my NRE account with POA. But I believe that it is not vice-versa.All the deposits in my wife?s resident account, where I am joint holder, are returns on my investments when I held resident status and also the amount received from the sale of property.

?Kamath

The bank is correct. You cannot have a resident account, joint or otherwise. In practice, several NRIs continue to hold their earlier joint or single resident accounts, however, looks like the bank wants to get its house in shape.

You can have a joint NRO account with your wife. Of course, she will be the second joint holder and you will be the primary holder. In which case, you can tell the bank to close the resident account and transfer all the funds to the joint NRO account. Else, the only other option is to get your name deleted and include yourself as a nominee.

?The authors may be contacted at wonderlandconsultants@yahoo.com