HUF can submit form 15G to bank

SC Vasudeva

What is a non-personal account? Is an Hindu Undivided Family (HUF) account with no income other than interest income on fixed deposits be termed as a non-personal account? Can the Karta file form 15G, if the interest income is less than taxable limit in a financial year? 

— vs chaudhri

Non-personal account would be such an account which is not in the name of an individual person. For example, an account in the name of a company or a body corporate. An account in the name of HUF should, therefore, be considered as a personal account as the same is always opened in the name of the Karta. The issue may, however, be clarified with the bank. According to the provisions of Section 197A(1B) of the Act, it should be possible for the HUF to file form 15G with the bank in case the interest income of the HUF is less than the taxable limit. This reply is based on the presumption that HUF has no other income except the interest income.

a) I retired as a personal assistant from Punjab State Power Corporation Limited (PSPCL). PSPCL releases one basic pension to their pensioners towards leave travel concession (LTC) on the completion of two years of their retirement date and onwards. PSPCL do not demand any documents as proof from their pensioners that the amount which was released to them towards LTC whether they have incurred. Will the amount received towards LTC (one basic pension) be merged with gross pension?

b) My relative had taken a home loan from a nationalised bank. After completion of the loan term, he has extended the loan. Will the interest accrued on extension of the home loan be deducted from his gross income under Chapter 24 (i)(iv)? If no, will the repayment amount be considered under Section 80C? 

— ramesh kumar 

Your queries are replied hereunder:-

a) Exemption in respect of LTC is allowed in the case of an ex-employee to the extent of the amount actually spent by the ex-employee for proceeding on leave to a place other than the place where he is residing.  Therefore, in case the amount has not been spent for the purpose for which it has been granted, the amount so received would be taxable under the head “Income from salary”.  The amount of pension received by you is, in any case, taxable under the aforesaid head.

b) It is presumed that extension of home loan which has been referred to in the query is with regard to the period over which the loan is payable. The amount of interest payable in such a case would be allowable as deduction under Section 24 of the Income Tax Act.  Further, the repayment of principal amount shall be deductible under Section 80C subject to the permissible limit of Rs 1,50,000.

a) I am a pensioner from PSPCL and have been submitting ITRs regularly. The sale deed is in my name (first) and in the name of my wife (second).  My wife has a PAN number. A few years ago, she had submitted ITRs (below taxable income) on account of embroidery work.  Due to some problems, she left the work and was not submitting ITRs.  My son, a Punjab Government employee, is living with us.  My wife has given a certificate to him stating therein that she will receive Rs 8,000 per month from him w.e.f. April 1, 2016, to March 31, 2017, towards providing accommodation. Do I need to club Rs 96,000 with my gross income?

b) I usually deposit the public provident fund amount after 5th of every month. How will the bank calculate interest on that amount? 

— ramesh kumar 

Your queries are replied hereunder:-

a) The amount of Rs 96,000 received by your wife for letting out the property to your son would be clubbed with your income in case the house, though registered in joint names, was purchased with the funds which were entirely contributed by you. Even if she had income from embroidery work in the years in which the property was purchased, until and unless she had contributed funds for the purchase of the property, for which necessary evidence is available, the income arising to her for letting out the property shall be clubbed with our income. The clubbing provisions would not arise in case it can be proved that the funds were contributed by her and in such a case she would be liable to pay tax in the ratio in which the investment in the house property was made by her.

b) Clause 8 of the Public Provident Fund Scheme, 1968, provides that interest at the rate, notified by the Central Government in the official gazette from time to time, shall be allowed for each calendar month on the lowest balance at credit of an account between the close of the fifth day and the end of the month and shall be credited to the account at the end of the each year.  It is advisable to deposit the amount before fifth day of every month.

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