In 2021, I purchased Kisan Vikas Patra (KVP) for ₹20 lakh. I’ve been paying revenue tax on the curiosity accrued on this yearly and in addition embrace it in my revenue tax returns (ITRs) . Since there’s no provision of tax deducted at supply (TDS) on the curiosity earned by KVP, its consolidated curiosity will mirror in my 26AS and annual info assertion. What ought to I do to keep away from double taxation on the time of redeeming the KVP?
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It’s assumed that you’re not required to take care of and get the books of accounts audited beneath the provisions of the Revenue-tax Act, 1961.
Part 145 of the Act offers for taxation of revenue from different sources (like curiosity) in accordance with both money or mercantile system of accounting commonly employed by the assessee. Therefore, if money foundation is commonly adopted, curiosity from Kisan Vikas Patra (KVP) could also be provided to tax within the 12 months of its maturity. If mercantile foundation is commonly adopted, the curiosity must be provided to tax yearly on an accrual foundation.
Within the on the spot case, you may have opted to supply to tax the curiosity revenue earned from KVP on mercantile foundation, which is presumably the common system of accounting adopted by you, in accordance with the above provisions.
In case of any inquiry in regards to the mismatch of the curiosity revenue showing within the AIS within the 12 months of maturity vis-à-vis the curiosity revenue provided to tax in that 12 months, the identical could also be defined on the premise of a reconciliation of the accrued quantity provided to tax in previous years’ tax return and obligatory documentary proof.
It might be individually famous that as per the present provisions of part 194A of the Act, on maturity of the KVP, no taxes are required to be deducted on the curiosity revenue. Therefore, tax due (if any) is fully payable as self-assessment tax / advance tax (as relevant).
Can a person who’s a minor open a public provident fund (PPF) account ?
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As per the provisions of the ‘PPF scheme, any particular person could, on his personal behalf or on behalf of a minor, of whom he’s the guardian, subscribe to the PPF. Therefore, solely a guardian on behalf of a minor is eligible to open a PPF account.
Do be aware that just one account might be opened within the title of a minor by any guardian. All different situations / limits as relevant in case of a PPF account are relevant for such account as effectively.
Parizad Sirwalla is companion and head, world mobility companies, tax, KPMG in India.