All Income Tax Queries (refunds, disputes, rates etc...)

earthian · 13th February 2018, 11:30

PPF account of NRIs:

Just the topic i was looking for. My son has a resident account in a bank in India and also has a PPF account which was opened before he went abroad. He now wants me to close the PPF and bank accounts (PPF account would be 6 years old) since he does not want any hassles with filing his taxes in the USA.
The plan is:
1. Close his PPF account prematurely and credit the proceeds in his savings bank account.
2. Close the savings bank account and gift the amount therein to me (father)
3. Later, i transfer the money to the USA as gift to him.

Is the plan okay and legal? Secondly what is the procedure to close the PPF account?

hothatchaway · 13th February 2018, 11:40

Quote:

Originally Posted by earthian

PPF account of NRIs:

Just the topic i was looking for. My son has a resident account in a bank in India and also has a PPF account which was opened before he went abroad. He now wants me to close the PPF and bank accounts (PPF account would be 6 years old) since he does not want any hassles with filing his taxes in the USA.
The plan is:
1. Close his PPF account prematurely and credit the proceeds in his savings bank account.

Premature closing of PPF account, i.e. before 15 years from date of opening is not allowed barring some specific conditions

https://economictimes.indiatimes.com...w/61571195.cms

binand · 13th February 2018, 12:46

Quote:

Originally Posted by hothatchaway

Premature closing of PPF account, i.e. before 15 years from date of opening is not allowed barring some specific conditions

This is for PPF accounts of residents. As far as NRIs are concerned, their PPF accounts are deemed closed on the day they became NRIs.

A semi-useful link:

https://www.tflguide.com/it-is-not-l...n-ppf-account/

Quote:

Originally Posted by earthian

1. Close his PPF account prematurely and credit the proceeds in his savings bank account.
2. Close the savings bank account and gift the amount therein to me (father)
3. Later, i transfer the money to the USA as gift to him.

Is the plan okay and legal? Secondly what is the procedure to close the PPF account?

Not sure why the gifting loop is required; why can't your son just remit the funds to USA directly? NRIs are not allowed to have SB accounts either; they need to convert those to NRO accounts (see link above).

Best would be to speak to the branch manager of the bank your son banks with in India.

earthian · 13th February 2018, 13:46

Quote:

Originally Posted by hothatchaway

Premature closing of PPF account, i.e. before 15 years from date of opening is not allowed ]

Thank you for your prompt reply.
NRI PPF accounts need to be closed as per latest directive, as binand has mentioned.

Quote:

Originally Posted by binand

Not sure why the gifting loop is required; why can't your son just remit the funds to USA directly?

Thank you for your reply.

The PPF account was being maintained by me ie: i was depositing the money which my son was oblivious of. He would not have shown it in his IRS returns in the USA. I thought the gifting loop allows us to overcome this hurdle?

binand · 13th February 2018, 15:14

Quote:

Originally Posted by earthian

The PPF account was being maintained by me ie: i was depositing the money which my son was oblivious of. He would not have shown it in his IRS returns in the USA. I thought the gifting loop allows us to overcome this hurdle?

If you were depositing money from your own income/funds then it is your account and should figure in your IT return, I'd say.

A quick Google search says Indian parents' gifts to American children do not attract tax but has disclosure requirements.

https://ttlc.intuit.com/questions/23...rents-overseas

earthian · 13th February 2018, 15:55

Quote:

Originally Posted by binand

If you were depositing money from your own income/funds then it is your account and should figure in your IT return, I'd say.

Many parents open PPF accounts for their children to help develop a nest egg - at least in our neck of woods viz: Gujarat. Since one cannot claim more than Rs1.5 lacs; such amounts deposited in children's names are usually not reckoned for IT deductions.

binand · 13th February 2018, 16:20

Quote:

Originally Posted by earthian

Many parents open PPF accounts for their children to help develop a nest egg - at least in our neck of woods viz: Gujarat. Since one cannot claim more than Rs1.5 lacs; such amounts deposited in children's names are usually not reckoned for IT deductions.

Yes, I myself do it. But there are two places PPF has to figure in your IT return - one, where the deposit can be used as part (or whole) of your section 80C deductions and two, where the interest you earn each year figures in your total income (PPF iterest is totally exempted, so you can set it off completely). I was talking of the second place.

In my own case I add the interest in schedule OS (Gross interest; PPF + SS + FDs + savings account etc.) and set it off completely in schedule EI (Interest income; PPF interest + SS interest + min(savings income, 10K)).

WindRide · 26th February 2018, 17:30

I have received a 143(1)(a) communication from IT dept regarding missed out FD interest in 'other income' as per Form 26AS. I had not mentioned this in my original IT return. Now what next? From the email i received, it appears i need to agree to this discrepancy and re-file my IT return? Is this correct?

Should i first pay tax for the additional income and then file tax returns? Could someone please advice on the steps i need to take?
Thanks!

hserus · 26th February 2018, 19:29

Quote:

Originally Posted by WindRide

I have received a 143(1)(a) communication from IT dept regarding missed out FD interest in 'other income' as per Form 26AS. I had not mentioned this in my original IT return. Now what next? From the email i received, it appears i need to agree to this discrepancy and re-file my IT return? Is this correct?

Should i first pay tax for the additional income and then file tax returns? Could someone please advice on the steps i need to take?
Thanks!

You have to pay tax + penalty for late payment + cess and then refile.

WindRide · 26th February 2018, 19:34

Quote:

Originally Posted by hserus

You have to pay tax + penalty for late payment + cess and then refile.

And how do i know the exact total amount to be paid?
Thanks!

binand · 26th February 2018, 20:33

Quote:

Originally Posted by WindRide

I have received a 143(1)(a) communication from IT dept regarding missed out FD interest in 'other income' as per Form 26AS. I had not mentioned this in my original IT return. Now what next? From the email i received, it appears i need to agree to this discrepancy and re-file my IT return? Is this correct?

Should i first pay tax for the additional income and then file tax returns? Could someone please advice on the steps i need to take?
Thanks!

You have to pay tax and then file. Paying tax starts here:

https://onlineservices.tin.egov-nsdl.../tdsnontds.jsp

(Challan no. is 280, Tax is Income Tax, Assessment year - be careful to choose the right one).

If you are using the Java utility it will tell you how much tax + interest you have to pay. It uses the system date to calculate interest, so make sure it is accurate. Once you pay, enter the BSR Code and challan serial number in the utility so that tax due = 0. Then file the revised return.

WindRide · 26th February 2018, 23:31

^ Thanks guys. Deed done.

hothatchaway · 28th February 2018, 14:23

Hi,
Anybody here still waiting for their 2016-17 FY IT returns to be processed? I had filed mine way back in July last year and the status was unchanged at 'successfully e-verified' till December 2017 at which point I filed a grievance with the AO online. The complaint remains unresolved showing 'pending' status.

While I am not eligible for any refunds, I would like my returns to be processed. It is almost time to file returns for 17-18!

binand · 28th February 2018, 14:37

Quote:

Originally Posted by hothatchaway

Hi,
Anybody here still waiting for their 2016-17 FY IT returns to be processed?

Me too. I am assuming the delay in my case is because of my change in form (I consulted for part of the year so had to file ITR-3). I have no refund as per my return.

WindRide · 1st March 2018, 20:35

I wish to open FDs in my wife's name by transferring part of my earnings (post-tax) to her savings bank account, from where she could issue cheques for the investments.

She is not working and has no other source of income.
Want to do this,since the total FD returns would be less than 2.5 lacs per annum and she will not be required to pay any tax for it. She will be filing IT returns.

Is there any problems doing such investments?

13th February 2018, 11:30	#1306
earthian BHPian Join Date: Jan 2016 Location: Ahmedabad Posts: 611 Thanked: 2,123 Times	Re: All Income Tax Queries (refunds, disputes, rates etc...) PPF account of NRIs: Just the topic i was looking for. My son has a resident account in a bank in India and also has a PPF account which was opened before he went abroad. He now wants me to close the PPF and bank accounts (PPF account would be 6 years old) since he does not want any hassles with filing his taxes in the USA. The plan is: 1. Close his PPF account prematurely and credit the proceeds in his savings bank account. 2. Close the savings bank account and gift the amount therein to me (father) 3. Later, i transfer the money to the USA as gift to him. Is the plan okay and legal? Secondly what is the procedure to close the PPF account?
	() Thanks

26th February 2018, 17:30	#1313
WindRide BHPian Join Date: Nov 2009 Location: Bangalore Posts: 682 Thanked: 479 Times	Re: All Income Tax Queries (refunds, disputes, rates etc...) I have received a 143(1)(a) communication from IT dept regarding missed out FD interest in 'other income' as per Form 26AS. I had not mentioned this in my original IT return. Now what next? From the email i received, it appears i need to agree to this discrepancy and re-file my IT return? Is this correct? Should i first pay tax for the additional income and then file tax returns? Could someone please advice on the steps i need to take? Thanks!
	() Thanks

26th February 2018, 23:31	#1317
WindRide BHPian Join Date: Nov 2009 Location: Bangalore Posts: 682 Thanked: 479 Times	Re: All Income Tax Queries (refunds, disputes, rates etc...) ^ Thanks guys. Deed done.
	() Thanks

28th February 2018, 14:23	#1318
hothatchaway BHPian Join Date: Aug 2012 Location: Kolkata Posts: 760 Thanked: 1,653 Times	Re: All Income Tax Queries (refunds, disputes, rates etc...) Hi, Anybody here still waiting for their 2016-17 FY IT returns to be processed? I had filed mine way back in July last year and the status was unchanged at 'successfully e-verified' till December 2017 at which point I filed a grievance with the AO online. The complaint remains unresolved showing 'pending' status. While I am not eligible for any refunds, I would like my returns to be processed. It is almost time to file returns for 17-18!
	() Thanks

1st March 2018, 20:35	#1320
WindRide BHPian Join Date: Nov 2009 Location: Bangalore Posts: 682 Thanked: 479 Times	Re: All Income Tax Queries (refunds, disputes, rates etc...) I wish to open FDs in my wife's name by transferring part of my earnings (post-tax) to her savings bank account, from where she could issue cheques for the investments. She is not working and has no other source of income. Want to do this,since the total FD returns would be less than 2.5 lacs per annum and she will not be required to pay any tax for it. She will be filing IT returns. Is there any problems doing such investments?
	() Thanks