Post office savings bank interest exempt

SC Vasudeva

Q. If my post office savings bank interest is Rs 3,500 in a financial year and interest from bank’s savings accounts is Rs 16,000, then what will be my taxable income — Rs 6,000 or Rs 6,000 + Rs 3,500 = 9,500? Please clarify.

— Sohan Pal Arora

A. On the basis of the facts given in the query, the amount includible in your income under the head “Income from other sources” would be Rs 16,000 less Rs 10,000 which is deductible under Section 80TTA of the Income-tax Act 1961 (The Act). The amount of Rs 3,500 being exempt from tax would not be includible in the total income.

Q. I and my wife are members of an HUF. I am a Karta of the same. Please let me know what will happen to the HUF and its assets in case of death of one member.

— Prem Chand

A. In case of death of the Karta of an HUF, the elder son becomes the Karta of the HUF of which his father was a Karta. The HUF property would continue to remain with the HUF. In case of the death of the wife of the Karta, the HUF would continue with the father, son and daughter, if any, as members of the HUF.

Q. I have opened an NPS account (Tier-I) in the name of my son whose income is nil. I am contributing the amount to his NPS account from my income. Please advise if I am entitled to rebate under Section 80CCD(1) or 80C(1)(B).

— A reader

A. Section 80CCD of the Act provides that where an assessee, being an individual has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government, he shall, in accordance with, and subject to the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount so paid or deposited as does not exceed 10% of his gross total income in the previous year. Therefore, the requirement under the said section is with regard to the deposit being made in the account of the person who is seeking deduction from his total income. The deposit in the account opened in the name of your son is not covered within the provision of the said section. The issue with regard to the deductibility of the amount paid by you under Section 80CC(1)(B) would arise only if you are covered in the provision of sub-section (1) of the said section.