PPF interest

Show ppf interest and LIC maturity proceeds under exempt income

Ideal way is to show interest from ppf each year in the return of income as exempt income and show principal amount in exempt income at the time of maturity. However, if you have not shown interest in exempt income in earlier years, you can show entire proceeds as exempt income in the year of receipt.

Entire LIC proceeds should be shown as exempt income in ITR

If bonus is specifically mentioned in the document, then show the bonus under exempt income

Hi,

PPF falls under EEE category i.e. Its interest as well as maturity proceeds are exempt provided some conditions are satisfied.

When you are earning interest on PPF the same is exempt from tax and the same should be shown under EI category in all the A.Y. in which the interest is earned. And said above PPF falls under EEE category, the interest and maturity both are exempt from Tax the maturity amount in the year it which is matured shall be shown as exempt income.

W.R.T to LIC maturity the maturity proceeds are exempt from tax. You need not deduct the premium paid from the same.

As interest is accumulated/bonus is earned on principal and the investment is notified by the govt, the total maturity amount is categorized as exempt income.

Hope this resolves your queries!

Hi,

You should Ideally show interest from PPF each year in the return as exempt income.

Entire LIC proceeds should be shown as exempt income in your return and not the premium amount only.

Regards,

Nikhil

Hi

The total maturity proceeds shall be included under exempt income in ITR for PPF as well as LIC.

If PPF interest was shown under exempt income annually, then such amount need not be included again at the time of maturity.

Dear Sir,

- Deduction u/s 80C is available against investment in PPF and LIC premium. At the time of maturity, you need to show them as exempt income under schedule EI as you had claimed the deduction from the GTI of the principal and interest amount invested/reinvested (in case of PPF).

- Interest from PPF each year should be shown under exempt income schedule.

- Proceeds from LIC on maturity is taxable if premium paid in any year exceeds 10% of sum assured on the policy issued after 01.04.2012 therefore you need to show it under Schedule EI if not taxable for reporting purpose.

Note- The purpose of law is that every income and receipt should get reported whether taxable or not because now every information is digitally linked so to avoid mismatch with their reports it is better to provide all such information's.

Thanks

If LIC maturity amt eligible for exemption u/s 10 (10) D then show in EI sheet of ITR

Dear Sir,

Hope you are doing well !

Please find below the responses:

The interest on PPF - PPF falls under EEE (Exempt,Exempt,Exempt) tax basket. Contribution to PPF account is eligible for tax benefit under Section 80C of the Income Tax Act. Interest earned is exempt from income tax and maturity proceeds are also exempt from tax.

Total maturity amount of lic - Exemption under section 10(10D) on Maturity amount received –When the premium paid on the policy does not exceed 10% of the sum assured – any amount received on maturity of a life insurance policy or amount received as bonus is fully exempt from Income Tax.

Both, should be shown as exempt income in your income tax return.

Thanks & Regards,

Payal Chhajed

Declare ppf interest and LIC maturity proceeds as exempt income.

That is how the reporting is done. Do not go by the literal meaning of exempt income.

You need to show maturity amount.