In 2021, I bought Kisan Vikas Patra (KVP) for ₹20 lakh. I’ve been paying income tax on the curiosity accrued on this yearly and as well as embrace it in my income tax returns (ITRs) . Since there’s no provision of tax deducted at provide (TDS) on the curiosity earned by KVP, its consolidated curiosity will mirror in my 26AS and annual information assertion. What must I do to steer clear of double taxation on the time of redeeming the KVP?
—Name withheld on request
It is assumed that you just’re not required to maintain up and get the books of accounts audited beneath the provisions of the Income-tax Act, 1961.
Section 145 of the Act provides for taxation of income from completely different sources (like curiosity) in accordance with each cash or mercantile system of accounting recurrently employed by the assessee. Hence, if cash basis is recurrently adopted, curiosity from Kisan Vikas Patra (KVP) is also provided to tax inside the 12 months of its maturity. If mercantile basis is recurrently adopted, the curiosity must be provided to tax yearly on an accrual basis.
In the second case, you might need opted to produce to tax the curiosity income earned from KVP on mercantile basis, which is presumably the frequent system of accounting adopted by you, in accordance with the above provisions.
In case of any inquiry regarding the mismatch of the curiosity income displaying inside the AIS inside the 12 months of maturity vis-à-vis the curiosity income provided to tax in that 12 months, the equivalent is also outlined on the premise of a reconciliation of the accrued amount provided to tax in earlier years’ tax return and very important documentary proof.
It is also individually well-known that as per the current provisions of half 194A of the Act, on maturity of the KVP, no taxes are required to be deducted on the curiosity income. Hence, tax due (if any) is completely payable as self-assessment tax / advance tax (as related).
Can an individual who’s a minor open a public provident fund (PPF) account ?
—Name withheld on request
As per the provisions of the ‘PPF scheme, any specific particular person may, on his private behalf or on behalf of a minor, of whom he is the guardian, subscribe to the PPF. Hence, solely a guardian on behalf of a minor is eligible to open a PPF account.
Do phrase that only one account can be opened inside the establish of a minor by any guardian. All completely different circumstances / limits as related in case of a PPF account are related for such account as correctly.
Parizad Sirwalla is confederate and head, worldwide mobility suppliers, tax, KPMG in India.
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