Hello, Following is my portfolio under secion 80 c: 1. investment of 1.5 lakhs in ppf 2. investment of 1.5 lakhs in sukanya samridhi yojana 3. investment of 50 thousand in lic 4. investment of 50 thousand in EPF 5. kid's tuition fee of 48 thousand It is obvious from above that my investment is much more than the eligible amount under section 80c but i am claiming only 1.5 lakhs under 80c. Now, i came to know from my friends that since i am investing more than the permissible amount under section 80c, so income tax department can deny to provide the interest on any/all of my investments at the time of maturity. And my friends even told me that the income tax officials will return me the principal amount only after maturity. Is it so? I tried to ask this question from almost from everybody i could think of that they can answer but nobody seems to be having 100% surety on their responses. Please provide me the plausible response!
Dear sir,
Dept. cant do that. You can always invest more amount in 80C with multiple sources. your question will only be applicable when you have invested more than Rs. 1.5 Lacs in any single source which is not the case. Suppose if you invest more than Rs. 1.5 in PPF than interest there on certainly become taxable otherwise for sure there is no problem at all.
Dear Sir,
You are partially correct in the sense you will not get deduction of more than 1.5 lacs. However, rest assured, Income tax department cannot restrict your interest. You will get your principal plus interest at the time of maturity.
Please feel free to call/ revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Hi,
that is not true. but yes, there are few investment in which there is lock in period and if investment is not kept till lock in period then those investments have to be reserved in the year in which it is revoked.
For example-
House loan - lock in period is 5 years that is the house on which loan is taken , period of holding of that house should not be less then is 5 years
PPF- it is 15 years/ 6 years
Life insurance premium- Deduction is restricted to 20% of capital sum assured in respect of policies issued on or
before 31-3-2012 and 10% in case of policies issued on or after 1-4-2012.
many more are there, for that you can visit the link given below:
http://www.simpletaxindia.net/2008/02/saving-under-80c-whose-name-can-be-done.html#axzz4aY5XH1gT
but as i see-
the investment made by you doesnt not have that impact as your investments in sukaniya, epf and tutuion fees covered Rs 1.5 lakhs.
so dont worry.
The investments eligible for deduction u/s 80C are not made with the Income Tax Department but with the respective agencies like PF,Bank,LIC..etc. Hence, the question of non-payment of interest does not arise.
If the investment made by you, on which you claimed deduction u/s 80C, are withdrawn before the lock in period, then the deduction allowed and taxed as income in the year such investments are withdrawn. Other than this, there is no provision for refusal of interest on any investments in excess of the limits specified u/s 80C.
Hi,
Your first contention is correct. You can calim only Rs. 1.5 Lakhs as deduction u/s 80C.
Regarding second point, you are investing the amount with respective Banks/Post Offices/Insurance Companies and not with IT Dept. When you are not investing the money with IT Dept, how can IT Dept officials withhold your Interest. Don't give in to such rumours. Your money is safe and you will earn full interest. However, since most of the investments you quoted are long-term and with lock-in-periods, you can withdraw the amount along with Interest only upon maturity or retirement.
Thanks a lot for your responses ! Fine. I got that. Now i have one more question: - i am investing 1.5 lakhs in my ppf and 1.5 in my daughter's ppf account (i am the guardian of her ppf account) and also depositing 1.5 lakhs on her sukanya samridhi account. Will it be an issue ? Can i cause trouble, specially the ppf amount as total ppf contribution (for my ppf and my daughter's ppf combined) is 3 lakhs ?
Yeah, depositing an amount of more than 1.5 lacs in PPF (your plus your daughter) could be an issue and your interest may be denied on excessive amount.
Don't deposit more than 1.5 lacs in PPF.
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Hi,
This will not be an issue. PPF Contribution is restricted to Rs. 1.5 Lakh per account in one FY. So, there is no issue if you invest 1.5 Lakh in yours as well as your daugher's PPF Account.
Dear sir,
Find below reply -
- No problem at all
The limit of ppf investment is per account. Since your and your minor daughter accounts are seperate one there will be no issue.
No issues until you can prove that you have source.
Your total investment upto 1.5 lakhs will only be allowed as deduction u/s 80C. The additional contributions do not have any problem from tax point of view, except that you cannot claim deduction u/s 80C on them.
no, it is not.
As you can not claim deduction for the amount you have invested in your daughter's PPF account.
If whatever money has been invested if from accounted money on which you have already paid tax.
There will be no issue, as the money can be utlised and invested by taxpayer once they are declared and taxes are paid.
Hello Sir,
There is nothing to worry about and you can very well deposit in both the PPF as well as the Sukanya Samridhi scheme.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
